Notice of 2016 Annual Meeting • Proxy Statement

American Electric Power1 Riverside PlazaColumbus, OH 43215

Nicholas K. AkinsChairman of the Board andChief Executive Officer

March 16, 2016

Dear Shareholders:

This year’s annual meeting of shareholders will be held at The Ohio State University Ohio Union, 1739 N. HighStreet, Columbus, Ohio on Tuesday, April 26, 2016, at 9:00 a.m. Eastern Time.

Your Board of Directors and I cordially invite you to attend. Registration will begin at 8:00 a.m. Only shareholderswho owned shares on the record date, February 29, 2016, are entitled to vote and attend the meeting. To attend themeeting, you will need to present an admission ticket or the notice you received. If your shares are registered inyour name, and you received your proxy materials by mail, your admission ticket is attached to your proxy card. Amap and directions are printed on the admission ticket. If your shares are registered in your name and you receivedyour proxy materials electronically via the Internet, you will need to print an admission ticket after you vote by click-ing on the “Options” button. If you hold shares through an account with a bank or broker, you will need to contactthem and request a legal proxy, or bring a copy of your statement to the meeting that shows that you owned theshares on the record date. Each ticket will admit a shareholder and one guest.

We are mailing to many of our shareholders a notice of Internet availability instead of a paper copy of this proxystatement and our 2015 Annual Report. The notice contains instructions on how to access those documents overthe Internet. The notice also contains instructions on how shareholders can receive a paper copy of our proxymaterials, including this proxy statement, our 2015 Annual Report and a form of proxy card or voting instructioncard.

During the course of the meeting there will be the usual time for discussion of the items on the agenda and for ques-tions regarding AEP’s affairs. Directors and officers will be available to talk individually with shareholders beforeand after the meeting.

Your vote is very important. Shareholders of record can vote in any one of the following three ways:

• By Internet, at www.envisionreports.com/AEP

• By toll-free telephone at 800-652-8683

• By completing and mailing your proxy card if you receive paper copies of the proxy materials

If your shares are held in the name of a bank, broker or other holder of record, you will receive instructionsfrom the holder of record that you must follow in order for you to vote your shares.

If you have any questions about the meeting, please contact Investor Relations, American Electric Power Company,1 Riverside Plaza, Columbus, Ohio 43215. The telephone number is 800-237-2667.

Sincerely,

NOTICE OF 2016 ANNUAL MEETING

American Electric Power Company, Inc.1 Riverside Plaza

Columbus, Ohio 43215

TIME . . . . . . . . . . . . . . . . . . . 9:00 a.m. Eastern Time on Tuesday, April 26, 2016

PLACE . . . . . . . . . . . . . . . . . . The Ohio State University Ohio Union1739 N. High StreetColumbus, Ohio

ITEMS OF BUSINESS . . . . . (1) To elect the 12 directors named herein to hold office until thenext annual meeting and until their successors are duly elected.

(2) To ratify the appointment of Deloitte & Touche LLP as the in-dependent registered public accounting firm for the year 2016.

(3) To hold an advisory vote on executive compensation.(4) To consider and act on such other matters as may properly

come before the meeting.

RECORD DATE . . . . . . . . . . Only shareholders of record at the close of business on February 29,2016 are entitled to notice of and to vote at the meeting or any ad-journment thereof.

ANNUAL REPORT . . . . . . . Appendix A to this proxy statement has AEP’s audited financialstatements, management’s discussion and analysis of results ofoperations and financial condition and the report of the in-dependent registered public accounting firm.

PROXY VOTING . . . . . . . . . It is important that your shares be represented and voted at the meet-ing. Please vote in one of these ways:(1) MARK, SIGN, DATE AND PROMPTLY RETURN your proxy

card if you receive paper copies of the proxy materials.(2) CALL TOLL-FREE by telephone at 800-652-8683.(3) VISIT THE WEB SITE shown on the notice of Internet avail-

ability of proxy materials to vote via the Internet.

If your shares are held in the name of a bank, broker or other holderof record, please follow the instructions from the holder of record inorder to vote your shares.

Any proxy may be revoked at any time before your shares are votedat the meeting.

March 16, 2016 David M. FeinbergSecretary

TABLE OF CONTENTS

Proxy and Voting Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Item 1: Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

AEP’s Board of Directors and Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Item 2: Proposal to Ratify Appointment of Independent Registered Public AccountingFirm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Item 3: Advisory Vote on Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Compensation Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Results of 2015 Advisory Vote to Approve Executive Compensation . . . . . . . . . . . . . . . . . . . . 25Program Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Compensation Peer Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Executive Compensation Program Detail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Other Compensation Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Human Resources Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Grants of Plan-Based Awards for 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Outstanding Equity Awards at Fiscal Year-End for 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Option Exercises and Stock Vested for 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Pension Benefits for 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Nonqualified Deferred Compensation for 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Potential Payments Upon Termination of Employment or Change in Control . . . . . . . . . . . . . 56

Share Ownership of Directors and Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67Section 16(a) Beneficial Ownership Reporting Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68Share Ownership of Certain Beneficial Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68Shareholder Proposals and Nominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68Solicitation Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70Exhibit A: Reconciliation of GAAP and Non-GAAP Financial Measures . . . . . . . . . . . . . . . . . . . A-1

Proxy StatementMarch 16, 2016

Proxy and Voting InformationA notice of Internet availability of proxy materials or paper copy of the proxy statement and

form of proxy is first being mailed or made available to shareholders on or about March 16, 2016,in connection with the solicitation of proxies by the Board of Directors of American Electric PowerCompany, Inc., 1 Riverside Plaza, Columbus, Ohio 43215, for the annual meeting of shareholdersto be held on April 26, 2016 in Columbus, Ohio.

We use the terms “AEP,” the “Company,” “we,” “our” and “us” in this proxy statement to re-fer to American Electric Power Company, Inc. and, where applicable, its subsidiaries. All refer-ences to “years,” unless otherwise noted, refer to our fiscal year, which ends on December 31.

Who Can Vote. Only the holders of shares of AEP common stock at the close of business onthe record date, February 29, 2016 are entitled to vote at the meeting. Each such holder has onevote for each share held on all matters to come before the meeting. On that date, there were491,074,888 shares of AEP common stock, $6.50 par value, outstanding.

How You Can Vote. Shareholders of record can give proxies by (i) mailing their signed proxycards; (ii) calling a toll-free telephone number; or (iii) using the Internet. The telephone and Inter-net voting procedures are designed to authenticate shareholders’ identities, to allow shareholdersto give their voting instructions and to confirm that shareholders’ instructions have been properlyrecorded. Instructions for shareholders of record who wish to use the telephone or Internet votingprocedures are set forth on the proxy card or the website shown on the notice of Internet avail-ability of proxy materials.

If your shares are held in the name of a bank, broker or other holder of record, you will receiveinstructions from the holder of record that you must follow in order for you to vote your shares.

When proxies are signed and returned, the shares represented thereby will be voted by thepersons named on the proxy card or by their substitutes in accordance with shareholders’ direc-tions. If a proxy card is signed and returned without choices marked, it will be voted for the nomi-nees for directors listed on the card and as recommended by the Board of Directors with respect toother matters. The proxies of shareholders who are participants in the Dividend Reinvestment andStock Purchase Plan include both the shares registered in their names and the whole shares held intheir plan accounts on February 29, 2016.

Revocation of Proxies. A shareholder giving a proxy may revoke it at any time before it isvoted at the meeting by voting again after the date of the proxy being revoked or by attending themeeting and voting in person.

How Votes are Counted. The presence of the holders of a majority of the outstanding sharesof common stock entitled to vote at the Annual Meeting, present in person or represented byproxy, is necessary to constitute a quorum. Abstentions and “broker non-votes” are counted aspresent and entitled to vote for purposes of determining a quorum. A “broker non-vote” occurswhen a broker holding shares for a beneficial owner does not vote on a particular proposal becausethe broker does not have discretionary voting power for that particular item and has not receivedinstructions from the beneficial owner.

Under current New York Stock Exchange (NYSE) rules, the proposal to ratify the appointmentof Deloitte & Touche LLP as our independent registered public accounting firm is considered a“discretionary” item. This means that brokerage firms may vote in their discretion on this matter

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on behalf of their clients who have not furnished voting instructions. The proposals to elect direc-tors and the advisory vote on executive compensation are “non-discretionary” matters. That meansthat brokerage firms may not use their discretion to vote on such matters without express votinginstructions from their clients.

The Company has implemented a majority voting standard for the election of directors in un-contested elections of directors. The election of directors at the Annual Meeting is an uncontestedelection, so for a nominee to be elected to the Board, the number of votes cast “for” the nominee’selection must exceed the number of votes cast “against” his or her election. Abstentions and brokernon-votes will not be considered votes cast “for” or “against” a nominee and will therefore have noeffect on the outcome. If a nominee does not receive a greater number of votes “for” his or her elec-tion than “against” such election, he or she will be required to tender his or her resignation for theBoard’s consideration of whether to accept such resignation in accordance with our Bylaws. Noshareholder has the right to cumulate his or her voting power in the election of directors at theAnnual Meeting.

Shareholder approval of Item 2: Proposal to Ratify Appointment of Independent RegisteredPublic Accounting Firm and Item 3: Advisory Vote on Executive Compensation require an affirma-tive vote of a majority of votes cast at a meeting of shareholders. This means that the votes cast“for” the proposal must exceed the votes cast “against” the proposal in order for the proposal topass. Abstentions and broker non-votes are not counted as votes “for” or “against” Item 3: Advi-sory Vote on Executive Compensation and therefore will have no effect on the outcome of the voteswith respect to such proposal.

Abstentions are not counted as votes “for” or “against” Item 2: Proposal to Ratify the Appoint-ment of Independent Registered Public Accounting Firm, and therefore, will have no effect on theoutcome of the vote with respect to such proposal.

Your Vote is Confidential. It is AEP’s policy that shareholders be provided privacy in voting.All proxies, voting instructions and ballots, which identify shareholders, are held on a confidentialbasis, except as may be necessary to meet any applicable legal requirements. We direct proxies toan independent third-party tabulator who receives, inspects, and tabulates them. Voted proxiesand ballots are not seen by nor reported to AEP except (i) in aggregate number or to determine if(rather than how) a shareholder has voted, (ii) in cases where shareholders write comments ontheir proxy cards or (iii) in a contested proxy solicitation.

Multiple Copies of Annual Report, Proxy Statement or Notice of Internet Availability ofProxy Materials to Shareholders. Securities and Exchange Commission (SEC) rules provide thatmore than one annual report, proxy statement or notice of Internet availability of proxy materialsneed not be sent to the same address. This practice is commonly called “householding” and is in-tended to eliminate duplicate mailings of shareholder documents. Mailing of your annual report,proxy statement or notice of Internet availability of proxy materials is being householded indef-initely unless you instruct us otherwise. We will deliver promptly upon written or oral request aseparate copy of the annual report, proxy statement or notice of Internet availability of proxy mate-rials to a shareholder at a shared address. To receive a separate copy of the annual report, proxystatement or notice of Internet availability of proxy materials, write to AEP, attention: InvestorRelations, at 1 Riverside Plaza, Columbus, OH 43215 or call 1-800-237-2667. If more than oneannual report, proxy statement or notice of Internet availability of proxy materials is being sent toyour address, at your request, mailing of the duplicate copy can be discontinued by contacting ourtransfer agent, Computershare Trust Company, N.A. (Computershare), at 800-328-6955 or writingto them at P.O Box 43078, Providence, RI 02940-3078. If you wish to resume receiving separateannual reports, proxy statements or notice of Internet availability of proxy materials at the sameaddress in the future, you may call Computershare at 800-328-6955 or write to them at P.O Box43078, Providence, RI 02940-3078. The change will be effective 30 days after receipt.

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Additional Information. Our website address is www.aep.com. We make available free ofcharge on the Investor Relations section of our website (www.aep.com/investors) our Annual Re-port on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amend-ments to those reports as soon as reasonably practicable after such material is electronically filedwith or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of1934 (Exchange Act). We also make available through our website other reports filed with or fur-nished to the SEC under the Exchange Act, including our proxy statements and reports filed byofficers and directors under Section 16(a) of the Exchange Act. You may request any of these mate-rials and information in print, free of charge, by contacting Investor Relations at: AEP, attention:Investor Relations, 1 Riverside Plaza, Columbus, OH 43215. We do not intend for information con-tained on our website to be part of this proxy statement. In addition, this proxy statement and theAnnual Report on Form 10-K for the fiscal year ended December 31, 2015 are available atwww.edocumentview.com/aep.

Item 1. Election of DirectorsTwelve directors are to be elected to hold office until the next annual meeting and until their

successors have been elected. AEP’s Bylaws provide that the number of directors of AEP shall besuch number, not less than 9 nor more than 17, as shall be determined from time to time by reso-lution of the Board.

The 12 nominees named on pages 4 to 7 were nominated by the Board on the recommendationof the Committee on Directors and Corporate Governance of the Board, following an individualevaluation of each incumbent nominee’s qualifications and 2015 performance. The proxies namedon the proxy card or their substitutes will vote for the Board’s nominees, unless instructed other-wise. All of the Board’s nominees were elected by the shareholders at the 2015 annual meeting.We do not expect any of the nominees will be unable to stand for election or be unable to serve ifelected. If a vacancy in the slate of nominees occurs before the meeting, the proxies may be votedfor another person nominated by the Board or the number of directors may be reduced accordingly.

The Board of Directors unanimously recommends a vote FOR each of the director nomineesbelow.

Biographical Information. The following brief biographies of the nominees include theirprincipal occupations, ages on the date of this proxy statement, accounts of their business experi-ence and names of certain companies of which they are directors. Data with respect to the numberof shares of AEP’s common stock and stock-based units beneficially owned by each of them ap-pears on page 67.

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Nominees For Director

Nicholas K. Akins

Dublin, Ohio

Age 55

Director since 2011

Elected chief executive officer of AEP in No-vember 2011; elected chairman of the board inJanuary 2014 and chairman and chief executiveofficer of all of its major subsidiaries in No-vember 2011. President of AEP from January2011 to October 2011 and executive vice presi-dent of AEP from 2006 to 2011. A director ofFifth Third Bancorp.

Mr. Akins’ qualifications to serve on the Boardinclude his extensive senior executive experi-ence in the utility industry and his deep knowl-edge of the Company as our chief executiveofficer.

David J. Anderson

Greenwich, Connecticut

Age 66

Director since 2011

Retired senior vice president and chief financialofficer of Honeywell International, a diversifiedtechnology and manufacturing company, from2003 until his retirement in April 2014. A direc-tor of Cardinal Health, Inc. and BE AerospaceInc.

Mr. Anderson’s qualifications to serve on theBoard include his corporate finance expertise asthe chief financial officer of a Fortune 100 com-pany and his experience as a public companydirector.

J. Barnie Beasley, Jr.

Sylvania, Georgia

Age 64

Director since 2014

Mr. Beasley served as an independent nuclearsafety and operations expert to the board of di-rectors of the Tennessee Valley Authority, alarge electric utility in the southeastern UnitedStates, from 2011 to 2014. Retired chairman,president and chief executive officer of South-ern Nuclear Operating Company, the nuclearoperating company subsidiary of an electricutility (2005-2008). Mr. Beasley was formerly adirector of EnergySolutions, Inc. (2008-2013),and he has served as an advisor to that companysince 2014.

Mr. Beasley’s qualifications to serve on theBoard include his nuclear expertise as the chiefexecutive officer of the nuclear operating com-pany subsidiary of Southern Company and hisexperience in the utility industry and as a pub-lic company director.

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Nominees for Director — continued

Ralph D. Crosby, Jr.

McLean, Virginia

Age 68

Director since 2006

Retired chairman of EADS North America, Inc.,an aerospace company (2002-2011). Retired chiefexecutive officer of EADS North America, Inc.(2002-2009). A director of Serco Group PLC andAirbus Group N.V. Mr. Crosby was formerly adirector of Ducommun Incorporated (2000-2013).

Mr. Crosby’s qualifications to serve on theBoard include his extensive senior executiveexperience in the aerospace industry and hisexperience as a public company director.

Linda A. Goodspeed

Crestview, Florida

Age 54

Director since 2005

Managing partner of Wealthstrategies FinancialAdvisors, LLC since 2008. Retired senior vicepresident and chief information officer of TheServiceMaster Company, a residential andcommercial service company (2011-2013). From2008 to 2011, vice president of information sys-tems of Nissan North America, Inc., an automo-bile manufacturer. A director of ColumbusMcKinnon Corp and AutoZone, Inc.

Ms. Goodspeed’s qualifications to serve on theBoard include her information technology ex-pertise as the chief information officer of a serv-ice company and her experience as a publiccompany director.

Thomas E. Hoaglin

Columbus, Ohio

Age 66

Director since 2008

Retired chairman and chief executive officer ofHuntington Bancshares Incorporated, a bankholding company (2001-2009). Member, Nomi-nating and Corporate Governance CommitteeChair Advisory Council of the National Associa-tion of Corporate Directors. A director of TheGorman-Rupp Company.

Mr. Hoaglin’s qualifications to serve on theBoard include his extensive senior executiveexperience in the banking industry and hisexperience as a public company director.

Sandra Beach Lin

Flower Mound, Texas

Age 58

Director since 2012

Retired chief executive officer of Calisolar, Inc.,a solar silicon company, a position she heldfrom August 2010 until December 2011. From2007 to 2010, executive vice president, thencorporate executive vice president of CelaneseCorporation, a global hybrid chemical company.Previous senior operating roles at Avery Denni-son, Alcoa and Honeywell. Member, Nominat-ing and Corporate Governance Committee ChairAdvisory Council of the National Association ofCorporate Directors. A director of WESCOInternational and PolyOne Corporation.

Ms. Lin’s qualifications to serve on the Board in-clude her extensive senior executive experiencemanaging global businesses in multiple industriesand her experience as a public company director.

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Nominees for Director — continued

Richard C. Notebaert

Chicago, Illinois

Age 68

Director since 2011

Retired chief executive officer of Qwest Commu-nications International Inc., a tele-communications systems company (2002-2007).A director of Aon Corporation. Mr. Notebaertwas formerly a director of Cardinal Health, Inc.(1999-2015).

Mr. Notebaert’s qualifications to serve on theBoard include his extensive senior executiveexperience in the regulated telecommunicationsindustry and his experience as a public com-pany director.

Lionel L. Nowell III

Marco Island, Florida

Age 61

Director since 2004

Retired senior vice president and treasurer ofPepsiCo, Inc., a food and beverage company(2001-2009). A director of Reynolds AmericanInc., Darden Restaurants Inc. and Bank of Amer-ica Corporation.

Mr. Nowell’s qualifications to serve on theBoard include his capital markets, accounting,financial reporting, and risk management skillsand experience at a Fortune 100 company, andhis experience as a public company director.

Stephen S. Rasmussen

Columbus, Ohio

Age 63

Director since 2012

Chief executive officer of Nationwide MutualInsurance Company (Nationwide) since 2009.President and chief operating officer of Nation-wide (2003 – 2009).

Mr. Rasmussen’s qualifications to serve on theBoard include his extensive senior executiveexperience in the regulated insurance industry.

Oliver G. Richard, III

Lake Charles, Louisiana

Age 63

Director since 2013

Chairman of privately held CleanfuelUSA, analternative vehicular fuel company since 2006.Owner and president of Empire of the SeedLLC, a private consulting firm in the energy andmanagement industries, as well as the privateinvestments industry since 2005. Mr. Richardserved as chairman, president and chief execu-tive officer of Columbia Energy Group(“Columbia Energy”) from April 1995 until Co-lumbia Energy was acquired by NiSource Inc. inNovember 2000. Mr. Richard served as a com-missioner of the Federal Energy RegulatoryCommission from 1982 to 1985. A director ofBuckeye Partners, L.P. and Cheniere EnergyPartners, GP, LLC.

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Nominees for Director — continued

Mr. Richard’s qualifications to serve on theBoard include his extensive knowledge of theutility industry as a former commissioner of theFederal Energy Regulatory Commission, his se-nior executive experience at a utility companyand his experience as a public company direc-tor.

Sara Martinez Tucker

Dallas, Texas

Age 60

Director since 2009

Former Chief Executive Officer of the NationalMath and Science Initiative from February 2013to March 2015. From 2009 to February 2013,independent consultant. Former Under Secre-tary of Education in the U.S. Department ofEducation (2006-2008). Chief executive officerand president of the Hispanic Scholarship Fundfrom 1997 to 2006. Retired executive of AT&T.A director of Xerox Corporation and SprintCorporation.

Ms. Tucker’s qualifications to serve on theBoard include her experience in governmentalaffairs as the Under Secretary of Education, herexperience in human resources and customerservice operations in the regulated tele-communications industry and her experience asa public company director.

AEP’s Board of Directors and CommitteesUnder New York law, AEP is managed under the direction of the Board of Directors. The

Board establishes broad corporate policies and authorizes various types of transactions, but it isnot involved in day-to-day operational details. During 2015, the Board held six regular meetingsand one telephonic meeting. AEP encourages but does not require members of the Board to attendthe annual shareholders’ meeting. Last year, all directors attended the annual meeting.

Two members of our Committee on Directors and Corporate Governance, Ms. Lin andMr. Hoaglin, are members of The National Association of Corporate Directors’ Nominating andGovernance Chair Advisory Council, a group that seeks to identify ways that board nominating andgovernance committees can help build investor confidence in publicly traded companies.

Board Meetings and Committees. The Board expects that its members will rigorously preparefor, attend and participate in all Board and applicable committee meetings. Directors are also ex-pected to become familiar with AEP’s management team and operations as a basis for dischargingtheir oversight responsibilities.

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The Board has seven standing committees. The table below shows the number of meetingsconducted in 2015 by each committee and the directors who currently serve on these committees.Each director attended 92 percent or more of the meetings of the Board and Board committees onwhich he or she served during 2015, and the average director attendance in 2015 was 98 percent.

DIRECTOR

BOARD COMMITTEES

Audit

Directorsand

CorporateGovernance Policy Executive Finance

HumanResources

NuclearOversight

Mr. Akins X X (Chair)Mr. Anderson X X X (Chair)Mr. Beasley X X XMr. Crosby X X X (Chair) XMs. Goodspeed X X XMr. Hoaglin X (Chair) X X XMs. Lin X X X (Chair)Mr. Notebaert X X X XMr. Nowell X (Chair) X X X XMr. Rasmussen X X X XMr. Richard X X X (Chair)Ms. Tucker X X X2015 Meetings 9 5 3 0 5 7 4

The functions of the committees are described below.

The Committee on Directors and Corporate Governance has the responsibilities set forth inits charter, including:

1. Recommending the size of the Board within the limits imposed by the Bylaws.

2. Recommending selection criteria for nominees for election or appointment to the Board.

3. Conducting independent searches for qualified nominees and screening the qualifications ofcandidates recommended by others.

4. Recommending to the Board nominees for appointment to fill vacancies on the Board as theyoccur and the slate of nominees for election at the annual meeting.

5. Reviewing and making recommendations to the Board with respect to compensation of direc-tors and corporate governance.

6. Recommending members to serve on committees and chairs of the committees of the Board.

7. Reviewing the independence and possible conflicts of interest of directors and executive offi-cers.

8. Overseeing the AEP Corporate Compliance Program.

9. Overseeing the annual evaluation of the Board of Directors.

10. Overseeing the annual evaluation of individual directors.

11. Overseeing the implementation of AEP’s Related Person Transaction Approval Policy.

12. Overseeing AEP’s Corporate Accountability Report, including the material concerning politi-cal contributions.

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13. Overseeing elements of the Company’s risks that are within the scope of the committee’s re-sponsibility as assigned to it by the Board of Directors.

A copy of the charter can be found on our website at www.aep.com/investors/corporateleadersandgovernance. Consistent with the rules of the NYSE and our Director In-dependence Standards, all members of the Committee on Directors and Corporate Governance areindependent.

The Human Resources Committee (the HR Committee) annually reviews and approves AEP’sexecutive compensation in the context of the performance of management and the Company. Noneof the members of the HR Committee is or has been an officer or employee of the Company or anyof its subsidiaries. In addition, each of the current members of the HR Committee has been de-termined to be independent by the Board in accordance with NYSE rules and our Director In-dependence Standards. In addition, each member is a “non-employee director” as defined in SECRule 16b-3 under the Exchange Act and is an “outside director” as defined in Section 162(m) of theInternal Revenue Code.

The HR Committee also reviews the Compensation, Discussion and Analysis section of thisproxy statement, and recommends that it be included in the Company’s Annual Report onForm 10-K.

The HR Committee has the responsibilities set forth in its charter, a copy of which can befound on our website at www.aep.com/investors/corporateleadersandgovernance.

For a more complete description of the HR Committee’s responsibilities, see the Human Re-sources Committee Report on page 41.

The Audit Committee is responsible for, among other things, the appointment of the in-dependent registered public accounting firm (independent auditor) for the Company; reviewingwith the independent auditor the plan and scope of the audit and approving audit fees; monitoringthe adequacy of financial reporting and internal control over financial reporting and meeting peri-odically with the internal auditor and the independent auditor. A more detailed discussion of thepurposes, duties and responsibilities of the Audit Committee is found in the Audit Committeecharter, a copy of which can be found on our website at www.aep.com/investors/corporateleadersandgovernance. Consistent with the rules of the NYSE and our Director In-dependence Standards, all members of the Audit Committee are independent. Each Audit Commit-tee member has sufficient knowledge in financial and auditing matters to serve on the AuditCommittee. In addition, the Board has determined that all members of the Audit Committee,Messrs. Anderson, Beasley and Nowell and Ms. Goodspeed, Ms. Lin and Ms. Tucker, are “auditcommittee financial experts” as defined by SEC rules.

The Finance Committee monitors and reports to the Board with respect to the capital require-ments and financing plans and programs of AEP and its subsidiaries, including reviewing andmaking recommendations concerning their short and long-term financing plans and programs. TheFinance Committee also provides recommendations to the Board on dividend policy, including thedeclaration and payment of dividends. The Finance Committee also reviews and approves thetreasury policies of the Company.

The Nuclear Oversight Committee is responsible for overseeing and reporting to the Boardwith respect to the management and operation of AEP’s nuclear generation.

The Policy Committee is responsible for examining AEP’s policies on major public issues af-fecting the AEP System, including environmental, technology, fuel supply, industry change andother matters.

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The Executive Committee is empowered to exercise all the authority of the Board, subject tocertain limitations prescribed in the Bylaws, during the intervals between meetings of the Board.

The Board’s role in AEP’s risk oversight processThe Board has the overall responsibility for overseeing the Company’s management of risks.

Management is responsible for identifying and managing the Company’s risks. The Board reviewsthe Company’s processes for identifying and managing risks and communicating with the Boardabout those risks to help ensure that the processes are effective.

Like other companies, we have very diverse risks. These include financial and accountingrisks, capital deployment risks, operational risks, cyber security risks, compensation risks, liquid-ity risks, litigation risks, strategic risks, regulatory risks, reputation risks, natural-disaster risks andtechnology risks. Some critical risks having enterprise-wide significance, such as corporate strat-egy and capital budget, require the full Board’s active oversight, but our Board committees alsoplay a key role because they can devote more time to reviewing specific risks. For example, ourNuclear Oversight Committee focuses on the specific risks of operating a nuclear plant. Othercommittees oversee both specific and broad types of risks. Some of the committees have oversightresponsibility for specific risks that are inherent in carrying out their responsibilities set forth intheir charters. For example, the Audit Committee is responsible for overseeing financial reportingrisks.

The Board is responsible for ensuring that these types of risks are properly delegated to theappropriate committee, and that the risk oversight activities are properly coordinated and commu-nicated among the Board and the various committees that oversee the risks. Management preparesand categorizes a list of the Company’s major types of risks. The Audit Committee reviews that listand proposes an assignment of risks either to the full Board or to specific committees. The Boardreviewed the recommendations and adopted the proposed allocation of responsibilities.

The Audit Committee oversees the Company’s maintenance of financial and disclosure con-trols and procedures and also specifically reviews our litigation and regulatory risks as part oftheir review of the Company’s disclosures. The Audit Committee also discusses AEP’s policies forrisk assessment and risk management. Our Chief Financial Officer, Chief Risk Officer, Chief Ac-counting Officer and General Counsel attend the Audit Committee meetings.

Our Finance Committee broadly oversees our financial risks, which include energy tradingrisks, liquidity risks and interest rate risks. The Finance Committee reviews and approves theCompany’s risk policies relating to our power marketing and hedging activities and also overseesthe performance of the assets in our pension plans. Our Chief Financial Officer and General Coun-sel attend the Finance Committee meetings.

Our HR Committee reviews the Company’s incentive compensation practices to ensure theydo not encourage excessive risk-taking and are consistent with the Company’s risk tolerance. TheHR Committee also oversees our succession planning and executive leadership development. OurChief Administrative Officer attends the HR Committee meetings.

The Committee on Directors and Corporate Governance focuses on corporate governance risksand oversees the Company’s Corporate Compliance Program, which includes the Company’s whis-tleblower program. Our General Counsel attends the meetings of the Committee on Directors andCorporate Governance.

Compensation RiskAs specified in its charter, the HR Committee (with the assistance of its independent compen-

sation consultant and Company management) reviewed the Company’s compensation policies and

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practices for all employees, including executive officers, and determined that the compensationprograms are appropriate and are not reasonably likely to have a material adverse effect on theCompany.

The Company has designed its executive compensation process, with oversight from the HRCommittee, to identify and manage risks and to ensure that its executive compensation programsdo not encourage excessive risk taking. The Company’s incentive compensation has the followingcharacteristics:

• Incentive award opportunities for employees as a group are capped at 200 percent of target,while awards for individual employees are capped at 250% of their target. Capping thepotential payout limits the extent that employees could potentially profit by taking on ex-cessive risk;

• The large majority of incentive compensation is provided to executive officers as long-termstock-based incentive compensation to ensure that short-term performance is not encour-aged or rewarded at the expense of long-term performance. This is important primarilybecause of the large amount of long-term capital investments required in our business;

• Annual incentive compensation funding for nearly all employees, including all executiveofficers, is based substantially on AEP’s operating earnings per share, which helps ensurethat incentive awards are commensurate with the Company’s earnings;

• Annual incentive compensation funding includes safety measures which helps ensure that noemployees are encouraged to achieve earnings objectives at the expense of workplace safety;

• The metrics used in the Company’s long-term incentive compensation are cumulative oper-ating earnings per share and relative total shareholder return compared to the S&P 500Electric Utilities Industry Index. These are both robust measures of shareholder value thatreduce the risk that employees might be encouraged to pursue other objectives that in-crease risk or reduce financial performance;

• Incentive compensation performance scores are subject to an internal audit. Incentiveaward payouts to senior AEP management are subject to review and approval of the HRCommittee, or, in the case of the CEO, the independent members of the Board, and thesegroups may discretionarily reduce or eliminate any payouts;

• Annual and long-term incentive payments and deferrals are subject to the Company’s re-coupment of incentive compensation policy (“clawback policy”) as described in the Com-pensation Discussion and Analysis section on page 38;

• In 2015, AEP granted seventy percent of its long-term incentive awards in the form of per-formance units with a three-year performance and vesting period, and granted the remain-ing thirty percent of its long-term incentive awards in the form of restricted stock units thatvest over a forty month period. These long-term incentive awards align the interests ofemployees with the long-term interests of shareholders and serve as a retention tool; and

• AEP maintains stock ownership requirements for 54 officers (as of January 31, 2016) asdescribed in Compensation Discussion and Analysis on page 37.

Corporate GovernanceAEP maintains a corporate governance page on its website that includes key information about

corporate governance initiatives, including AEP’s Principles of Corporate Governance, AEP’s Prin-ciples of Business Conduct, Code of Business Conduct and Ethics for Members of the Board of Di-rectors, Director Independence Standards, and charters for the Audit Committee, the Committee onDirectors and Corporate Governance and the HR Committee. The corporate governance page can befound at www.aep.com/investors/corporateleadersandgovernance. Printed copies of all of thesematerials also are available without charge upon written request to Investor Relations at: AEP, at-tention: Investor Relations, 1 Riverside Plaza, Columbus, Ohio 43215.

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AEP’s policies and practices reflect corporate governance initiatives that are designed to com-ply with SEC rules, the listing requirements of the NYSE and the corporate governance require-ments of the Sarbanes-Oxley Act of 2002, including:

• The Board of Directors has adopted corporate governance principles;

• All members but the CEO are independent under the NYSE rules and our Director In-dependence Standards;

• All members of the Audit Committee, HR Committee and the Committee on Directors andCorporate Governance are independent under applicable rules and regulations;

• The independent members of the Board meet regularly without the presence of manage-ment;

• AEP has a code of business conduct that applies to its principal executive officer, principalfinancial officer and principal accounting officer and will promptly disclose waivers of thecode for these officers;

• AEP has a Code of Business Conduct and Ethics for Members of the Board of Directors;

• The charters of the Board committees clearly establish their respective roles and re-sponsibilities; and

• The Board, the Committee on Directors and Corporate Governance, the Audit Committeeand the HR Committee conduct annual self-assessments. The Committee on Directors andCorporate Governance also oversees the annual evaluation of the individual directors.

Director QualificationsThe Company’s Principles of Corporate Governance (Principles) are available on its website at

www.aep.com/investors/corporateleadersandgovernance. With respect to director qualificationsand attributes, the Principles provide that, in nominating a slate of Directors, it is the Board’s ob-jective, with the assistance of the Committee on Directors and Corporate Governance, to select in-dividuals with skills and experience to effectively oversee management’s operation of the Compa-ny’s business.

In addition, the Principles provide that directors should possess the highest personal and pro-fessional ethics, integrity and values, and be committed to representing the long-term interests ofthe shareholders, and that directors must also have an inquisitive and objective perspective, prac-tical wisdom and mature judgment.

These requirements are expanded in the Criteria for Evaluating Directors (Criteria), which wasinitially adopted by the Committee on Directors and Corporate Governance in 2005 and has beensubsequently reviewed and refined several times. The Criteria are available on the Company’swebsite at www.aep.com/investors/corporateleadersandgovernance.

As indicated in the Principles and the Criteria, directors should have personal attributes suchas high integrity, intelligence, wisdom and judgment. In addition, they should have skills andexperience that mesh effectively with the skills and experience of other Board members, so thatthe talents of all members blend together to be as effective as possible in overseeing a large electricutility business.

Board DiversityOur Criteria for Evaluating Directors also includes the Company’s statement regarding how the

Board considers diversity in identifying nominees for our Board. The Criteria provide:

Two central objectives in selecting board members and continued board service are that theskills, experiences and perspectives of the Board as a whole should be broad and diverse, andthat the talents of all members of the Board should blend together to be as effective as possi-ble. In particular, the Board should be balanced by having complementary knowledge, ex-

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pertise and skill in areas such as business, finance, accounting, marketing, public policy,manufacturing and operations, government, technology, environmental and other areas thatthe Board has decided are desirable and helpful to fulfilling its role. Diversity in gender, race,age, tenure of board service, geography and background of directors, consistent with theBoard’s requirements for knowledge and experience, are desirable in the mix of the Board.

Our Committee on Directors and Corporate Governance considers these criteria each year as itdetermines the slate of director nominees to recommend to the Board for election at our annualmeeting. It also considers these criteria each time a new director is recommended for election orappointment to the Board. The Board believes that its implementation of this policy is effective inconsidering the diversity of the members of the Board.

Annual Board EvaluationEach year, an independent third party, experienced in corporate governance matters, inter-

views each Director to obtain his or her assessment of the effectiveness of the Board and commit-tees, including identifying any opportunities the Board can focus on to enhance its effectiveness.In addition, the third party seeks input as to the performance of each individual Director. Then thethird party organizes the Director feedback and reviews it with the Chair of the Committee on Di-rectors and Corporate Governance (the “Corporate Governance Committee Chair”). The CorporateGovernance Committee Chair holds private conversations with each Director to provide perform-ance feedback. The Corporate Governance Committee Chair also reviews with the Committee andthe full Board the assessment of the Board’s performance and leads a discussion to determinewhich areas the Board would like to focus on during the coming year to enhance its effectiveness.Finally, the Corporate Governance Committee Chair engages the Board in a mid-year discussion togauge the Board’s satisfaction with the progress made in addressing any focus areas that wereidentified by the Board in its annual evaluation.

Selection of Director CandidatesThe Committee on Directors and Corporate Governance is responsible for recruiting new direc-

tors and identifies, evaluates and recommends director candidates to the Board. The committeeregularly assesses the appropriate size and composition of the Board, the needs of the Board andthe respective committees of the Board and the qualifications of candidates in light of these needs.Candidates may come to the attention of the committee through shareholders, management, cur-rent members of the Board or search firms. Shareholders who wish to recommend director candi-dates to the Committee on Directors and Corporate Governance may do so by following the proce-dures described in Shareholder Proposals and Nominations on page 68.

In recruiting and selecting Board candidates, the Committee on Directors and Corporate Gover-nance takes into account the size of the Board and considers a “skills matrix” indicating whether aparticular candidate possesses the attributes and one or more of the skill sets described under“Director Qualifications” and “Board Diversity” above, as well as whether those skills and/or otherattributes qualify him or her for service on a particular committee. The committee also considers awide range of additional factors, including each candidate’s projected retirement date to assist inBoard succession planning; other positions the candidate holds, including other boards of direc-tors on which he or she serves; and the independence of each candidate. Typically, the committeeidentifies candidates through the use of an outside search firm. The committee provides the out-side search firm the characteristics, skills and experiences that may complement those of the exist-ing members. The outside search firm then provides recommendations for candidates with suchattributes and skills. The committee meets in executive session to discuss potential candidates anddetermines which candidates to interview.

The committee believes it is important to have a mix of experienced directors with a deepunderstanding of the Company and others who bring a fresh perspective. In this regard, the com-

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mittee has recruited four new directors to the Board over the last four years (33 percent of the cur-rent Board) through the rigorous process described above. In our view, the best method to ensurehealthy board evolution is through thoughtful consideration of the nomination of directors prior toeach election or appointment based on a variety of factors, including director performance, skillsand expertise, the Company’s needs and board diversity.

Director IndependenceIn accordance with the NYSE standards, a majority of the members of the Board of Directors

must qualify as independent directors. Under the NYSE standards, no member of the Board is in-dependent unless the Board affirmatively determines that such member does not have a direct orindirect material relationship with the Company. The Board has adopted categorical standards toassist it in making this determination of director independence (Director Independence Standards).These standards can be found on our web site at www.aep.com/investors/corporateleadersandgovernance.

Each year, our directors complete a questionnaire that elicits information to assist the Commit-tee on Directors and Corporate Governance in assessing whether the director meets the NYSE’sindependence standards and the Company’s Director Independence Standards. Each director listsall the companies and charitable organizations that he or she, or an immediate family member, hasa relationship with as a partner, trustee, director or officer, and indicates whether that entity madeor received payments from AEP. The Company reviews its financial records to determine theamounts paid to or received from those entities. A list of the entities and the amounts AEP paid toor received from those entities is provided to the Committee on Directors and Corporate Gover-nance. Utilizing this information, the Committee on Directors and Corporate Governance evaluates,with regard to each director, whether the director has any material relationship with AEP or any ofits subsidiaries and also confirms that none of these relationships is advisory in nature. The Com-mittee on Directors and Corporate Governance determines whether the amount of any paymentsbetween those entities and AEP could interfere with a director’s ability to exercise independentjudgment. The Committee on Directors and Corporate Governance also reviews any other relevantfacts and circumstances regarding the nature of these relationships, to determine whether otherfactors, regardless of the categorical standards the Board has adopted or under the NYSE’s in-dependence standards, might impede a director’s independence.

We are a large electric utility company that operates in parts of eleven different states. Anyorganization that does business in our service territory is served by one of our subsidiaries. Manyof our directors live in our service territory or are executives, directors or trustees of organizationsthat do business in our service area. Most of those organizations purchase electric service from us.However, these organizations purchase electric service from us at tariff rates or at rates obtainedthrough a competitive bid process. Therefore, the Committee on Directors and Corporate Gover-nance determined that none of those relationships impedes a director’s independence.

We make numerous charitable contributions to nonprofit and community organizations anduniversities in the states where we do business. Again, because many of our directors live in ourservice territory and are highly accomplished individuals in their communities, our directors arefrequently affiliated with many of the same educational institutions, museums, charities and othercommunity organizations. The Committee on Directors and Corporate Governance reviews chari-table contributions made by AEP to organizations with which our directors or their immediatefamily members are affiliated. The Committee on Directors and Corporate Governance also re-viewed contributions made from The American Electric Power Foundation, which was created tosupport and play an active, positive role in the communities in which we operate by contributingfunds to organizations in those communities. The Committee on Directors and Corporate Gover-nance determined that the Company’s contributions were not materially influenced by the direc-tor’s relationship with the organization, and therefore none of these relationships conflicts withthe interests of the Company or would impair the director’s independence or judgment.

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The Board’s independence determinations specifically included reviewing the following trans-actions with Mr. Rasmussen, who is an executive officer of Nationwide Insurance. Nationwidepurchases electricity from our subsidiaries (substantially less than one percent of the Company’sgross revenues). In addition, the Company paid an insignificant amount to Nationwide for stan-dard insurance premiums, rent for office space and interest payments on ordinary course debt is-sued by the Company and its subsidiaries, which was sold through underwriters or brokers (whichtotaled substantially less than one percent of Nationwide’s gross revenues). The transactions be-tween Nationwide and the Company were in the ordinary course and entered into on an arm’slength basis, and payments were for services that were transactional in nature and did not involveany consulting or advisory work. Therefore, the Board determined that these transactions did notimpair the independence of Mr. Rasmussen.

As a result of this review, the Board has determined that, other than Mr. Akins, each of thedirectors and director nominees standing for election, including Messrs. Anderson, Beasley,Crosby, Hoaglin, Notebaert, Nowell, Rasmussen and Richard and Ms. Goodspeed, Ms. Lin andMs. Tucker, has no material relationship with the Company (either directly or as a partner, stock-holder or officer of an organization that has a relationship with the Company) and is independentunder the NYSE rules and the Company’s Director Independence Standards.

Shareholder Nominees for DirectorsThe Committee on Directors and Corporate Governance will consider shareholder recom-

mendations of candidates to be nominated as directors of the Company. All such recommendationsmust be in writing and submitted in accordance with the procedures described under ShareholderProposals and Nominations on page 68 and must include information required in AEP’s Policy onConsideration of Candidates for Director Recommended by Shareholders. A copy of this policy ison our website at www.aep.com/investors/corporateleadersandgovernance. Shareholders’ nomi-nees who comply with these procedures will receive the same consideration that all other nomi-nees receive.

Board LeadershipWe believe the Company and its shareholders are best served by a Board that has the flexi-

bility to establish a leadership structure that fits the needs of the Company at a particular point intime. Under the Company’s Principles of Corporate Governance, the Board has the authority tocombine or separate the positions of Chairman and CEO, as well as to determine whether, if thepositions are separated, the Chairman should be an employee, non-employee or an independentdirector.

The Board believes that the functioning of the Board is currently best served by maintaining astructure of having one individual serve as both Chairman and CEO. The Board believes that hav-ing a single person acting in those capacities promotes unified leadership and direction for boththe Board and management and also provides a single, clear focus to execute the Company’s strat-egy especially during this time of significant change in the utility business. However, in certaincircumstances, such as the transition from one chief executive officer to another, the Board be-lieves it may be appropriate for the role of Chairman and CEO to be split.

Under the Company’s Principles of Corporate Governance, in circumstances where the Chair-man of the Board is not independent or where the positions of Chairman and Chief Executive Offi-cer are filled by the same person, the Board considers it useful and appropriate to designate a LeadDirector. The Company already has policies and practices in place to provide independent over-sight of management and the Company’s strategy. The Board currently includes 11 independentdirectors among its 12 members. The Board routinely holds executive sessions at which only in-dependent directors are present, and, each year, the independent directors select a Lead Directorresponsible for facilitating and chairing the independent directors sessions.

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Mr. Hoaglin has been the Lead Director of the Board since April 2012. The purpose of the LeadDirector is to promote the independence of the Board in order to represent the interests of theshareholders. The Lead Director is selected by the independent directors.

The Lead Director is responsible for working closely with the CEO to finalize information flowto the Board, set meeting agendas and arrange meeting schedules. He also chairs meetings of theindependent directors and serves as principal liaison between the independent directors and man-agement. In addition, Mr. Hoaglin has the ability to call special meetings of the Board, as needed,and also has the authority to retain outside legal counsel or other advisors as needed by the Board.He provides a channel of communication between the directors and management, assures that di-rectors receive timely and necessary information in advance of meetings and receives communica-tions from shareholders on behalf of non-employee directors.

Communicating with the Board

Anyone who would like to communicate directly with our Board, our independent directorsas a group or our Lead Director, may submit a written communication to American Electric PowerCompany, Inc., P.O. Box 163609, Attention: AEP Independent Directors, Columbus, Ohio 43216.The Company’s Corporate Secretary reviews such inquiries or communications, and communica-tions other than advertising or promotions of a product or service are forwarded to our Board, ourindependent directors as a group or our Lead Director, as appropriate.

Shareholder Outreach

In 2015, the Company engaged in discussions with a number of its largest shareholders thattogether held over 32% of its outstanding stock. This allowed the Company to gain valuable feed-back from its shareholders regarding proxy access, including feedback as to the particular proxyaccess parameters that AEP’s shareholders view as appropriate. Based on the feedback receivedfrom AEP’s shareholders during the engagement process, the Board designed a proxy accessframework for AEP which it believes will provide meaningful access for shareholders while safe-guarding the long-term interests of AEP and its shareholders and limiting the potential for abuse.The Bylaws permit a shareholder, or a group of up to 20 shareholders, owning 3% or more of theCompany’s outstanding common stock continuously for at least three years to nominate and in-clude in the Company’s proxy materials directors constituting up to the greater of (i) 20% of theBoard or (ii) two directors, provided that the shareholder(s) and the nominee(s) satisfy therequirements specified in the Bylaws.

We listen and consider shareholder perspectives in our decision making and have made en-hancements to our corporate governance programs based on input we received. For example, sev-eral of our largest shareholders asked us to consider reducing the number of public companyboards that our directors may serve on from six to four. We amended our Principles of CorporateGovernance in September 2015 to make that change. As part of that outreach, we also discussedthe two management proposals that were voted on at last year’s annual meeting to eliminatesupermajority vote provisions. The proposal to amend the Company’s Articles of Incorporation todelete the provision on business combinations with interested shareholders passed. However, theproposal to eliminate the supermajority provision in the Company’s Bylaws failed to receive theaffirmative vote of the holders of two-thirds of the outstanding shares. That provision in the By-laws provides that a supermajority vote of shareholders is required to amend the Bylaws to changethe existing provision that requires the annual election of directors. Although supermajority provi-sions are generally disfavored, AEP believes that the annual election of directors is a preferredcorporate governance principle. Therefore, the Company does not intend to continue to pursue ashareholder vote to eliminate this supermajority provision.

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Transactions with Related Persons

The American Electric Power Company, Inc. Related Person Transaction Approval Policy(Policy) was adopted by the Board in December 2006. The written Policy is administered by theCommittee on Directors and Corporate Governance. A copy of the Policy is available on our web-site at www.aep.com/investors/corporateleadersandgovernance.

The Policy defines a “Transaction with a Related Person” as any transaction or series of trans-actions in which (i) the Company or a subsidiary is a participant, (ii) the aggregate amount in-volved exceeds $120,000 and (iii) any “Related Person” has a direct or indirect material interest. A“Related Person” is any director or executive officer of the Company, any nominee for director, anyshareholder owning in excess of five percent of the total equity of the Company and any immediatefamily member of any such person.

The Committee on Directors and Corporate Governance considers all of the relevant facts andcircumstances in determining whether or not to approve a Transaction with a Related Person andapproves only those transactions that it believes are in the best interests of the Company and itsshareholders. The Committee on Directors and Corporate Governance considers various factors,including, among other things: the nature of the Related Person’s interest in the transaction;whether the transaction involves arm’s-length bids or market prices and terms; the materiality ofthe transaction to each party; the availability of the product or services through other sources;whether the transaction would impair the judgment of a director or executive officer to act in thebest interest of the Company; the acceptability of the transaction to the Company’s regulators; andin the case of a non-employee director, whether the transaction would impair his or her in-dependence or status as an “outside” or “non-employee” director.

If Company management determines it is impractical or undesirable to wait until a meeting ofthe Committee on Directors and Corporate Governance to consummate a Transaction with a Re-lated Person, the Chair of the Committee on Directors and Corporate Governance may review andapprove the Transaction with a Related Person. Any such approval is reported to the Committee onDirectors and Corporate Governance at or before its next regularly scheduled meeting.

No approval or ratification of a Transaction with a Related Person supersedes the requirementsof the Company’s Code of Business Conduct and Ethics for Members of the Board of Directors orAEP’s Principles of Business Conduct applicable to any executive officer. To the extent applicable,any Transaction with a Related Person is also considered in light of the requirements set forth inthose documents.

Since January 1, 2015, there have been no transactions, and there are no currently proposedtransactions, involving an amount exceeding $120,000 in which AEP was or is expected to be aparticipant and in which any Related Person had a direct or indirect material interest.

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Director CompensationDirectors who are employees of the Company receive no additional compensation for service

as a director other than accidental insurance coverage. The table below shows the elements and theannual compensation that we paid to our non-employee directors for 2015. The annual rate forsome of the elements changed on October 1, 2015.

Compensation ElementUntil

September 30, 2015On and After

October 1, 2015

Annual Retainer (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000 $105,500

Annual Stock Unit Awards (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000 157,500

Committee Chair Annual Retainers (1):

Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 25,000

HR Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000

Audit Committee Member Annual Retainers (1) . . . . . . . . . . . . . . . 15,000 15,000

HR Committee Member Annual Retainers (1) . . . . . . . . . . . . . . . . . 10,000 10,000

Lead Director Annual Retainer (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 30,000

(1) Retainer amounts are paid in cash in quarterly installments.(2) In 2015, pursuant to the Stock Unit Accumulation Plan for Non-Employee Directors, each non-

employee director serving a full year was awarded $151,875 in AEP stock units. These AEPstock units are credited to directors quarterly, in an amount calculated by dividing the dollarvalue of the award amount by the closing price of AEP common stock on the grant date.Amounts equivalent to cash dividends on the AEP stock units accrue as additional AEP stockunits. AEP stock units are paid to each non-employee director in cash shortly after terminationof service unless the director has elected to further defer payment.

The Board has determined that Board compensation should consist of a mix of cash and AEPstock units. In September 2015, upon the recommendation of the Committee on Directors and Cor-porate Governance and taking into account comparative data from Meridian Compensation Part-ners, LLC, an outside independent consultant (“Meridian”), the Board determined that, effectiveOctober 1, 2015, (i) the amount of AEP stock units awarded to non-employee directors pursuant tothe Stock Unit Accumulation Plan should increase from $150,000 annually to $157,500 annuallyand, (ii) the amount of the annual cash retainer paid to non-employee directors should increasefrom $100,000 annually to $105,500 annually.

The Board believes that the director compensation set forth above compensates directors ap-propriately for all general services that are rendered as a director, committee member, committeechair or as Lead Director, including education and training appropriate to the director’s re-sponsibilities. The Company believes, however, that special compensation can be appropriatewhen individual directors are asked to undertake special assignments requiring a significantamount of additional time, effort and responsibility. The Board’s Special Compensation Policyprovides for directors to be compensated at a daily rate when called upon to undertake specialadditional services beyond those contemplated by the Annual Retainer. Under the SpecialCompensation Policy, the Committee on Directors and Corporate Governance determines (a) theamount of any special compensation in light of the actual or anticipated time, effort and responsi-bility required of the director and (b) the form of special compensation, which may include a perdiem fee, an hourly fee, a flat fee or any other reasonable payment or payments. No special com-pensation was paid for services provided in 2015.

Expenses. Directors are reimbursed for expenses incurred in attending Board, committee andshareholder meetings. Directors are also reimbursed for reasonable expenses associated with otherbusiness activities that benefit the Company, including participation in director education programs.

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Spouses may occasionally join directors on Company aircraft when a director is traveling to orfrom Board meetings or other business activities. The Company generally provides for, or re-imburses the expenses of, the directors and their spouses for attendance at such meetings. The Di-rectors do not receive any tax gross-ups.

Retainer Deferral Plan. The Retainer Deferral Plan for Non-Employee Directors is a non-qualified deferred compensation plan that permits non-employee directors to choose to defer up to100 percent of their annual cash retainer and fees into a variety of investment fund options, allwith market-based returns, including an AEP stock fund. The Plan permits the non-employeedirectors to defer receipt until termination of service or for a period that results in payment com-mencing not later than five years after termination of service.

Insurance. AEP maintains a group 24-hour accident insurance policy to provide a $1,000,000accidental death benefit for each director, $100,000 for each spouse of a director and $50,000 forall dependent children. The current policy, effective September 1, 2015 to September 1, 2018, hasa premium of $28,905.

Stock Ownership. Non-employee directors are required by our Corporate GovernancePrinciples to own AEP common stock or AEP stock units worth five times their annual equityaward, which is met within the first five years of a non-employee director’s term by requiring thedirector to hold the AEP stock units awarded under the Stock Unit Accumulation Plan. Each non-employee director is required to hold these stock units until termination of service.

After five years of service on the Board, non-employee directors receive contributions to anAEP stock fund under the Stock Unit Accumulation Plan. During open trading windows they maysubsequently transfer those amounts into other investment fund options, similar to those in theRetainer Deferral Plan.

Matching Gifts Program. Directors may participate in our Matching Gifts Program on thesame terms as AEP employees. Under the program, AEP will match between $250 and $1,000 perhigher education institution each year in charitable contributions from a director.

2015 Director Compensation TableThe following table presents the compensation provided by the Company in 2015 to our non-

employee directors.

Name

FeesEarned

OrPaid inCash ($)

StockAwards

($)(1)(2)

All OtherCompensation

($)(3)

Total($)

David. J. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,375 151,875 803 269,053J. Barnie Beasley, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,375 151,875 1,803 270,053Ralph D. Crosby, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,375 151,875 803 284,053Linda A. Goodspeed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,375 151,875 803 269,053Thomas E. Hoaglin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141,375 151,875 803 294,053Sandra Beach Lin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,375 151,875 803 269,053Richard C. Notebaert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,375 151,875 803 264,053Lionel L. Nowell III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141,375 151,875 803 294,053Stephen S. Rasmussen . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,375 151,875 803 264,053Oliver G. Richard III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,375 151,875 803 264,053Sara M. Tucker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,375 151,875 1,803 270,053

(1) The dollar amounts reported represent the grant date fair value calculated in accordance withFASB ASC Topic 718 of AEP stock units granted under the Stock Unit Accumulation Plan forNon-Employee Directors, without taking into account estimated forfeitures. AEP stock unitsare credited to directors quarterly.

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(2) Each non-employee director who served the full year received 2,710 AEP stock units in 2015.The current directors had the following aggregate number of AEP stock units, including divi-dend equivalents, at 2015 year-end: Mr. Anderson (15,680), Mr. Beasley, (5,321) Mr. Crosby(37,334), Ms. Goodspeed (38,170), Mr. Hoaglin (31,113), Ms. Lin (10,693), Mr. Notebaert(15,680), Mr. Nowell (42,224), Mr. Rasmussen (10,122), Mr. Richard (8,926) and Ms. Tucker(26,688).

(3) The amounts reported in All Other Compensation consists of the Company-paid (a) premiumof $803 for accidental death insurance policy, and (b) matching gift contributions of $1,000 forMr. Beasley and $1,000 for Ms. Tucker.

InsuranceInsurance. AEP and the AEP System Companies and their directors and officers are insured,

subject to certain exclusions and deductibles, against losses resulting from any claim or claimsmade against them while acting in their capacities as directors and officers. Such insurance, effec-tive March 15, 2015 to May 1, 2016, is provided by: Associated Electric & Gas Insurance ServicesLtd.(AEGIS), Energy Insurance Mutual, Ltd.(EIM), Zurich American Insurance Company, U.S. Spe-cialty Insurance Company(HCC), XL Specialty Insurance Company, Arch Insurance Company,Travelers Casualty and Surety Company of America, Westchester Fire Insurance Company (ACE),Berkley Insurance Company, RSUI Indemnity Company, Alterra America Insurance Company,Freedom Specialty Insurance Company, Illinois National Fire Insurance Company (AIG), AlliedWorld Assurance Company Ltd. (AWAC), Liberty Insurance Underwriters, Inc., Endurance Ameri-can Insurance Company, Catlin Specialty Insurance Company and ACE Bermuda LTD. The totalcost of this insurance is $3,539,734.

Fiduciary liability insurance provides coverage for AEP System companies and their affiliatedtrusts, their directors and officers, and any employee deemed to be a fiduciary or trustee, forbreach of fiduciary responsibility, obligation, or duties as imposed under the Employee RetirementIncome Security Act of 1974. Such insurance, effective March 15, 2015 to May 1, 2016, is providedby U.S. Specialty Insurance Company (HCC), XL Specialty Insurance Company, Energy InsuranceMutual, Ltd.(EIM), and Freedom Specialty Insurance Company. The total cost of this insurance is$630,570.

Item 2. Proposal to Ratify Appointment of Independent RegisteredPublic Accounting Firm

The Audit Committee is responsible for the appointment, fees and oversight of the Company’sindependent registered public accounting firm. The Audit Committee has appointed the firm ofDeloitte & Touche LLP as the Company’s independent registered public accounting firm for 2016.The Audit Committee reviews and assesses annually the qualifications and performance of theindependent registered public accounting firm and considers, as appropriate, the rotation of theindependent registered public accounting firm. Additionally, the Audit Committee is involved inthe selection and mandated rotation of the lead engagement partner from Deloitte & Touche LLP.The Audit Committee believes that the continued retention of Deloitte & Touche LLP as our in-dependent registered public accounting firm is in the best interest of the Company and our share-holders, and we are asking our shareholders to ratify the selection of Deloitte & Touche LLP as ourindependent registered public accounting firm for 2016. Although action by the shareholders inthis matter is not required, the Audit Committee believes that it is appropriate to seek shareholderratification of this appointment in light of the critical role played by the independent registeredpublic accounting firm in maintaining the integrity of the Company’s financial controls and report-ing, and will seriously consider shareholder input on this issue. Whether or not the appointmentof Deloitte & Touche LLP is ratified by the shareholders, the Audit Committee may, in its dis-cretion, change the appointment at any time during the year if it determines that such changewould be in the best interests of the Company and its shareholders.

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One or more representatives of Deloitte & Touche LLP will be in attendance at the annual meet-ing on April 26, 2016. The representatives will have the opportunity to make a statement, if de-sired, and will be available to respond to appropriate questions from shareholders.

Vote Required.Approval of this proposal requires the affirmative vote of holders of a majority of the votes

cast at the meeting.

Your Board of Directors recommends a vote FOR this Item 2.

Audit and Non-Audit FeesThe following table presents fees for professional audit services rendered by Deloitte & Touche

LLP for the audit of the Company’s annual financial statements for the years ended December 31,2015 and December 31, 2014, and fees billed for other services rendered by Deloitte & Touche LLPduring those periods.

2015 2014

Audit Fees(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,934,000 $11,689,000Audit-Related Fees(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,456,000 $ 781,000Tax Fees(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 262,000 $ 137,000

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,652,000 $12,607,000

(1) Audit fees in 2014 and 2015 consisted primarily of fees related to the audit of the Company’sannual consolidated financial statements, including each registrant subsidiary. Audit fees alsoincluded auditing procedures performed in accordance with Sarbanes-Oxley Act Section 404and the related Public Company Accounting Oversight Board Auditing Standard Number 5regarding the Company’s internal control over financial reporting. This category also includeswork generally only the independent registered public accounting firm can reasonably be ex-pected to provide.

(2) Audit-related fees consisted principally of regulatory, statutory and employee benefit planaudits.

(3) Tax fees consisted principally of advisory services. Tax services are rendered based upon factsalready in existence, transactions that have already occurred, as well as tax consequences ofproposed transactions.

The Audit Committee has considered whether the provision of services other than audit serv-ices by Deloitte & Touche LLP and its domestic and global affiliates is compatible with maintain-ing independence, and the Audit Committee believes that this provision of services is compatiblewith maintaining Deloitte & Touche LLP’s independence.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-AuditServices of the Independent Registered Public Accounting Firm

The Audit Committee’s policy is to pre-approve all services provided by the independent regis-tered public accounting firm. These services may include audit services, audit-related services, taxservices and other services. Pre-approval is provided for up to one year, and any pre-approval isdetailed as to the particular service or category of services and is subject to a specific limitation.The independent registered public accounting firm and management are required to report to theAudit Committee at each regular meeting regarding the extent of services provided by the in-dependent registered public accounting firm in accordance with this pre-approval policy, and thefees for the services performed to date. The Audit Committee Chairman may also pre-approve par-ticular services on a case-by-case basis. In 2015, all Deloitte & Touche LLP services were pre-approved by the Audit Committee in accordance with this policy.

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Audit Committee ReportThe Audit Committee reviews AEP’s financial reporting process as well as the internal control

over financial reporting on behalf of the Board. Management has the primary responsibility for thefinancial statements and the reporting process, including the system of internal control over finan-cial reporting.

The Audit Committee met nine times during the year and held discussions, some of whichwere in private, with management, the internal auditor, and the independent registered publicaccounting firm. Management represented to the Audit Committee that AEP’s consolidated finan-cial statements were prepared in accordance with generally accepted accounting principles. Man-agement has also concluded that the Company’s internal control over financial reporting was effec-tive as of December 31, 2015. The Audit Committee has reviewed and discussed the auditedconsolidated financial statements and internal control over financial reporting with management,the internal auditor and the independent registered public accounting firm. The Audit Committeediscussed with the independent registered public accounting firm the matters required to be dis-cussed by the Public Company Accounting Oversight Board (PCAOB).

In addition, the Audit Committee had discussions with and received written communicationsfrom the independent registered public accounting firm regarding its independence as required bythe PCAOB. The Audit Committee has also received written communication regarding the resultsof the independent registered public accounting firm’s internal quality control reviews and proce-dures and other matters, as required by the New York Stock Exchange listing standards.

In reliance on the reviews, communications and discussions referred to above, the AuditCommittee recommended to the Board that the audited financial statements be included in AEP’sAnnual Report on Form 10-K for the year ended December 31, 2015, for filing with the SEC.

Audit Committee MembersLionel L. Nowell, III, ChairDavid J. AndersonJ. Barnie Beasley, Jr.Linda A. GoodspeedSandra Beach LinSara Martinez Tucker

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Item 3. Advisory Vote on Executive CompensationWe are including in these proxy materials a separate resolution for shareholders to vote upon,

on an advisory (non-binding) basis, the compensation paid to our named executive officers as dis-closed in this proxy statement in accordance with the SEC’s rules.

As described in detail under the heading “Compensation Discussion and Analysis,” our execu-tive compensation programs are designed to attract, motivate, and retain our named executive offi-cers who are critical to our success. Under these programs, our named executive officers are re-warded for the achievement of annual and long-term goals. Please read the “CompensationDiscussion and Analysis” beginning on page 24 for additional details about the 2015 compensationof our named executive officers.

The HR Committee continually reviews the compensation programs for our named executiveofficers to ensure they achieve the desired goals of aligning our executive compensation structurewith our shareholders’ interests and current market practices. As a result of its review process, theHR Committee maintains the following executive compensation practices:

• Emphasizing long-term incentive compensation to promote the longer-term interests of theCompany and encourage management to make decisions that are aligned with share-holders’ interests;

• Tying the value of a substantial portion (70 percent, which the HR Committee increased to75 percent effective January 1, 2016) of this long-term compensation to two robust meas-ures of shareholder value:

• Three-year total shareholder return compared to the S&P 500 Electric UtilitiesIndustry Index, and

• Three year cumulative operating earnings per share compared to a Board-approvedtarget;

• Maintaining a clawback policy that allows the Board to recoup any excess incentive com-pensation paid to our named executive officers and other key members of our executiveteam if the financial results on which the awards were based are materially restated due tomisconduct of the executive.

We are asking our shareholders to indicate their support for our named executive officer com-pensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay”proposal, gives our shareholders the opportunity to express their views on our named executiveofficers’ compensation. This advisory vote is not intended to address any specific item of compen-sation, but rather the overall compensation of our named executive officers and the philosophy,policies and practices described in this proxy statement. Accordingly, we ask our shareholders tovote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as dis-closed in the Company’s Proxy Statement for the 2016 Annual Meeting of Shareholders pursuantto rules of the SEC, including the Compensation Discussion and Analysis, compensation tablesand related narrative disclosure is hereby APPROVED.”

While the Board intends to consider carefully the results of this vote, the say-on-pay vote isadvisory only, and therefore will not be binding on the Company or our Board of Directors.

Vote Required.Approval of this proposal requires the affirmative vote of holders of a majority of the votes

cast at the meeting.

Your Board of Directors recommends a vote FOR this Item 3.

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Other BusinessThe Board of Directors does not intend to present to the meeting any business other than the

election of directors, the ratification of the appointment of the independent registered public ac-counting firm, and the advisory vote on the compensation of the named executive officers as dis-closed in this proxy statement.

If any other business not described herein should properly come before the meeting for actionby the shareholders, the persons named as proxies on the proxy card or their substitutes will votethe shares represented by them in accordance with their best judgment. At the time this proxystatement was printed, the Board of Directors was not aware of any other matters that might bepresented.

Compensation Discussion and AnalysisThis section explains AEP’s compensation philosophy, summarizes its compensation pro-

grams and reviews compensation decisions for the following named executive officers:

Name Title

Mr. Akins . . . . . . . . . . . . . . . . . . . . . . . . . Chairman, Chief Executive Officer and PresidentMr. Tierney . . . . . . . . . . . . . . . . . . . . . . . Executive Vice President and Chief Financial OfficerMr. Powers . . . . . . . . . . . . . . . . . . . . . . . Executive Vice President and Chief Operating OfficerMr. Feinberg . . . . . . . . . . . . . . . . . . . . . . Executive Vice President and General CounselMr. Zebula . . . . . . . . . . . . . . . . . . . . . . . . Executive Vice President-Energy Supply

Executive Summary2015 Business Performance Highlights. The Company’s 2015 operating earnings were $3.69

per share, which exceeded the upper end of our original operating earnings guidance for the yearof $3.40-$3.60 per share. At the beginning of the year, the HR Committee established threshold(0 percent of target payout), target and maximum (200 percent of target payout) operating earningsper share measures for 2015 annual incentive compensation at $3.35, $3.50 and $3.65 per share,respectively. The HR Committee increased the performance target for annual incentive compensa-tion by $0.20 per share from AEP’s 2014 target, a 6.1 percent increase.

During 2015, we continued to execute on our strategy of investing in our core regulated busi-nesses to improve service to customers, while demonstrating continuous improvement in ouroperations. Our Transmission Holding Company business thrived and contributed 39 cents pershare to 2015 earnings, an increase of 26 percent. Based on our strong earnings in 2015, we wereable to increase our 2015 capital investments by $200 million. This additional capital was allo-cated to transmission investment where we have significant opportunities to enhance and rebuildinfrastructure in both our regulated utility operating companies and our Transmission HoldingCompany business. We also benefitted from successful regulatory proceedings in several states.The Company increased its quarterly dividend by 5.7 percent in October 2015. And, for the fourthyear in a row, the Company did not experience a fatal employee accident.

Throughout this CD&A, we refer to operating earnings, which is a non-GAAP financial meas-ure. Exhibit A to this proxy statement contains a reconciliation of GAAP earnings per share tooperating earnings per share for 2015.

2015 Earned Incentive Compensation Highlights. The Company’s 2015 operating earningsper share, together with the Company’s performance on strategic measures and safety, produced aninitial score of 182.2 percent of target. The HR Committee also established two extra credit goals for2015, up to a 7.5 percent credit for zero fatalities and up to a 5 percent credit for cultural improve-ment. Although the Company did not experience a fatal employee accident in 2015, management

24

recommended and the HR Committee approved a 50 percent reduction in the zero fatality extracredit score due to two nearly fatal electrical contact incidents in 2015, which resulted in a 3.8percent addition to the score. The HR Committee considered the Company’s culture and employeeengagement improvement and awarded 5 percent for this measure. As a result, the overall annualincentive funding for AEP’s executive officers was 191.0 percent of target for 2015.

The cumulative operating earnings per share score for the 2013-2015 performance units was152.5 percent of target. The relative total shareholder return (TSR) measure at the end of the per-formance period was at the 83rd percentile of the S&P 500 Electric Utilities Industry Index, whichproduced a score of 200 percent of target. The operating earnings per share and TSR scores com-bined to produce an overall score of 176.3 percent of target for the 2013-2015 performance period.As a result, 176.3 percent of the 2013-2015 performance units outstanding at year-end were earned.

Other Highlights. Effective January 1, 2016, the HR Committee changed the mix of long-termincentive awards to increase the percentage granted in the form of performance units from 70 per-cent to 75 percent, and to reduce the percentage granted in the form of restricted stock units from30 percent to 25 percent. The HR Committee made this change to increase the amount of long-termincentive compensation that is performance-based.

Compensation Governance Best Practices. Below is a summary of our executive compensa-tion practices that are aligned with best practice. The Company has:

• Significant stock ownership requirements for its executive officers;

• Tied a substantial portion of the compensation for its executives to annual and long-termperformance;

• A policy that allows the Company to claw back incentive compensation in certain circum-stances;

• An insider trading policy that prohibits our executives and directors from hedging theirAEP stock holdings and from pledging Company stock;

• Granted long-term incentive awards with change in control provisions that include a dou-ble trigger that results in vesting of these awards only if there is a change in control and aninvoluntary or constructive separation from service;

• Eliminated the reimbursement and tax gross-up for excise taxes triggered under change incontrol agreements;

• Eliminated company paid country club memberships for executive officers;

• Generally eliminated personal use of Company provided aircraft, to the extent that suchuse has an incremental cost to the Company; and

• Eliminated tax gross-ups, other than for relocations.

Results of 2015 Advisory Vote to Approve Executive CompensationAt the Company’s annual meeting of shareholders held in April 2015, approximately 96 per-

cent of the votes cast on the Company’s say-on-pay proposal voted in favor of the proposal. Afterconsideration of this vote, the HR Committee continued to apply the same principles and philoso-phy it has used in previous years in determining executive compensation. The HR Committee willcontinue to consider the outcome of the Company’s say-on-pay vote and other sources of stake-holder feedback when establishing compensation programs and making compensation decisionsfor the named executive officers.

The Board decided that AEP will hold an advisory vote on the compensation of named execu-tive officers at each annual meeting of shareholders until the next required shareholder vote todetermine the frequency of the advisory votes on executive compensation. Because the Dodd-

25

Frank Act requires that such frequency votes be held at least once every six years, we currentlyexpect the next shareholder vote on frequency to occur at the Company’s 2017 annual meeting ofshareholders.

Overview

The HR Committee oversees and determines AEP’s executive compensation (other than that ofthe CEO). The HR Committee makes recommendations to the independent members of the board ofdirectors about the compensation of the CEO, and those independent board members determinethe CEO’s compensation.

AEP’s executive compensation program is designed to:

• Attract, retain, motivate and reward an outstanding leadership team with market com-petitive compensation and benefits to achieve both excellent team and individual perform-ance;

• Reflect AEP’s financial and operational size and the complexity of its multi-state oper-ations;

• Provide a substantial portion of executive officers’ total compensation opportunity in theform of performance based incentive compensation;

• Align the interests of the Company’s named executive officers with those of AEP’s share-holders by providing a majority of the total compensation opportunity for executive offi-cers in the form of stock-based compensation with a value that is linked to the total returnon AEP’s common stock and by maintaining significant stock ownership requirements forexecutives;

• Support the implementation of the Company’s business strategy by tying annual incentiveawards to an operating earnings per share target and the achievement of specific strategicand safety objectives; and

• Promote the stability of the management team by creating strong retention incentives withmulti-year vesting schedules for long-term incentive compensation.

Overall, AEP’s executive compensation program is intended to create a total compensationopportunity (base salary, annual incentive opportunity and long-term incentive opportunity) that,on average, is equal to the median of AEP’s Compensation Peer Group, as described underCompensation Peer Group on page 28. The HR Committee’s independent compensation consultant,Meridian Compensation Partners, LLC (Meridian), participates in HR Committee meetings, assiststhe HR Committee in developing the compensation program and regularly meets with the HRCommittee in executive session without management present. See the Human Resources Commit-tee Report on page 43 for additional information about Meridian’s independence.

Program Design

The program for executive officers includes base salary, annual incentive compensation, long-term incentive compensation and a comprehensive benefits program. The Company provides abalance of annual and long-term incentive compensation that is consistent with the compensationmix provided by AEP’s Compensation Peer Group. For AEP’s annual incentive compensation, theHR Committee balances meeting AEP’s operating earnings per share target with strategic, operat-ing, safety, zero fatality and corporate culture objectives.

For 2015, operating earnings per share had a 75 percent weight for annual incentive compensa-tion and the remaining 25 percent weight was tied to strategic, operating and safety goals. The HR

26

Committee also established two extra credit goals for 2015: zero fatalities and culture, which couldadd up to an additional 7.5 percent and up to an additional 5 percent to the score, respectively.

For 2015, 70 percent of AEP’s long-term incentive compensation was awarded in the form ofperformance units with three-year performance measures tied to (1) AEP’s total shareholder returnrelative to all of the companies in the S&P 500 Electric Utilities Industry Index and (2) AEP’s three-year cumulative operating earnings per share relative to a Board-approved target. The performanceunits are subject to a three-year vesting period. The remaining 30 percent of AEP’s long-term in-centive compensation was awarded as restricted stock units (RSUs) which vest over 40 months inthree approximately equal installments on the May 1st following the first, second and third anni-versaries of the grant date.

The HR Committee annually reviews the mix of the three elements of total direct compensa-tion: base salary, annual incentive compensation and long-term incentive compensation. As illus-trated in the charts below, in 2015, 66 percent of the target total direct compensation for the CEOand 58 percent on average for the other named executive officers was performance-based (targetannual incentive compensation and grant date value of performance units). An additional 21 per-cent of the CEO’s target total direct compensation and an additional 17 percent on average for theother named executive officers were provided in the form of time-vesting RSUs (grant date value)which are tied to AEP’s stock price.

Performance-Based

Restricted Stock Units

Base Salary

Performance-Based

Long-Term Incentive

Chief Executive OfficerMix of Performance-Based Pay

Chief Executive OfficerMix of Pay Elements Based on

Target Award Opportunities

Other Named ExecutivesAverage Mix of Pay Elements Based on

Target Award Opportunities

Other Named ExecutivesAverage Mix of Performance-Based Pay

Base Salary

Annual Cash Incentive

Long-Term Incentive

Base Salary

Annual Cash Incentive

Restricted Stock Units

66%

21%13%

70%

17%

13%

58%

17% 25%Base Salary

57%

18% 25%

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Compensation Peer GroupThe HR Committee, supported by its independent compensation consultant, annually reviews

AEP’s executive compensation relative to a peer group of companies that represent the talent mar-kets with which AEP must compete to attract and retain executives. The companies included inthe Compensation Peer Group were chosen from electric utility companies that were comparablein size to AEP in terms of revenues and market capitalization. There were no changes in AEP’sCompensation Peer Group for 2015, which consisted of the 17 utility companies shown below.

AES CorporationCenterpoint Energy, Inc.Consolidated Edison Inc.Dominion Resources, Inc.DTE Energy CompanyDuke Energy CorporationEdison InternationalEntergy CorporationExelon CorporationFirstEnergy Corp.NextEra Energy, Inc.PG&E CorporationPPL CorporationPublic Service Enterprise Group Inc.Sempra EnergySouthern CompanyXcel Energy Inc.

The table below shows that, at the time the Compensation Peer Group data was collected inJuly 2014, AEP’s revenue and market capitalization were above the 50th percentile, and closer tothe 75th percentile, of the peer group.

2015 Compensation Peer Group

Revenue($ million)

MarketCap

($ million)

Compensation Peer Group25th Percentile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,915 $13,10550th Percentile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,581 $17,85475th Percentile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,598 $28,481

AEP $15,357 $25,406

The HR Committee’s independent compensation consultant annually provides the HR Commit-tee with an executive compensation study covering all executive officer positions and other execu-tive positions based on survey information for the Compensation Peer Group. The study method-ology and job matches are generally determined by the HR Committee’s independentcompensation consultant in consultation with AEP management based on descriptions of eachexecutive’s responsibilities. This process is overseen by the HR Committee. The standard bench-mark is the median value of total compensation paid by the Compensation Peer Group to officersserving in similar capacities. For the executive compensation studies, where possible, the marketvalues were adjusted for relative size based on AEP’s revenue or the executive’s revenue responsi-bility using regression analysis, for all positions for which regression data was available. The HRCommittee considers percentiles other than the median and may select any percentile as a bench-mark if, in its judgment, such other benchmarks provide a better comparison based on the specificscope of the job being matched or other criteria.

28

To the extent that AEP’s total compensation opportunity is above or below the +/- 15 percenttarget range around the Compensation Peer Group median, the HR Committee adjusts elements ofpay over time to bring the executive’s total compensation opportunity into the target range. Basesalaries, total cash compensation (base salary plus short-term incentive compensation) and totaldirect compensation (total cash compensation plus long-term incentive compensation) were, onaverage, all well within the market competitive range shown in the executive compensation studyfor the named executive officers.

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Executive Compensation Program Detail

Summary of Executive Compensation Components. The following table summarizes themajor components of the Company’s executive compensation program.

Component Purpose Key Attributes

Base Salary • To provide a market-competitiveand consistent minimum level ofcompensation that is paidthroughout the year.

• A 3 percent executive merit budgetand an additional 0.5% for othertypes of salary adjustments wasapproved by the HR Committee for2015.

• Merit and other salary increases forexecutives are awarded by the HRCommittee based on a variety offactors, which are described underBase Salary on page 31.

AnnualIncentiveCompensation

• To focus executive officers onachieving annual earnings andother performance objectives thatare critical to AEP’s success.

• The performance objectives for2015 included:

• Operating Earnings (75 percentweight)

• Safety (10 percent weight)

• Strategic Initiatives (15 percentweight)

• Zero Fatalities (7.5 percent ex-tra credit), and

• Culture (5 percent extra credit).

• To communicate and alignexecutives’ and employees’ effortswith the Company’s performanceobjectives.

• Annual incentive targets areestablished by the HR Committeebased on market competitivecompensation informationprovided by the HR Committee’sindependent compensationconsultant.

• Actual awards for employees asa group are capped at 200 per-cent of target, while awards forindividual employees are cap-ped at 250 percent of their target.

• Operating earnings per share waschosen as the primary performancemeasure for 2015.

• An operating earnings per sharethreshold of $3.35 per share wasestablished that providedannual incentive funding for theplan as a whole only if thethreshold was reached.

• The CEO’s award is determined bythe independent members of theBoard of Directors, and the otherNEO awards are determined andapproved by the HR Committee andbased on:

• Achievement against perform-ance objectives, and

• A subjective evaluation of eachnamed executive officer’s in-dividual performance for theyear.

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Component Purpose Key Attributes

Long-TermIncentiveCompensation

• To motivate AEP management tomaximize shareholder value bylinking a substantial portion oftheir potential compensationdirectly to shareholder returns.

• To help ensure that Companymanagement remains focused onlonger-term results, which the HRCommittee considers essentialgiven the significant long-terminvestments in physical assetsrequired in our business.

• To reduce executive turnover andmaintain management consistency.

• For 2015, the HR Committeeprovided long-term incentiveawards in the form of three-yearperformance units for 70 percent ofthe grant value and restricted stockunits (RSUs) for 30 percent of thegrant value.

• Each NEO’s total target long-termincentive award is based on:

• Award guidelines for each sal-ary grade and market com-petitive compensation in-formation provided by the HRCommittee’s independent com-pensation consultant, and

• A subjective evaluation of theindividual’s potential con-tribution to shareholder valueduring the performance period.

• For the 2015-2017 performanceunit awards, the HR Committeeestablished the following equallyweighted performance measures:

• Three-year cumulative operat-ing earnings per share relativeto a target approved by the HRCommittee, and

• Three-year total shareholderreturn relative to the S&P 500Electric Utilities Industry Index.

Base Salary. Merit and other salary increases for executives are awarded based on:

• The current scope and responsibilities of the position;

• The Company’s merit and other increase budgets;

• Sustained individual performance as assessed by each executive’s direct manager;

• The market competitiveness of the executive’s salary, total cash compensation and totalcompensation;

• Internal comparisons;

• The experience and future potential of each executive; and

• Reporting relationships.

The HR Committee approved 3 percent merit budgets for 2015 and 2016. The HR Committeeprovided merit increases to the named executive officers for 2015 and 2016 in the 2-4 percentrange, except for Mr. Zebula. He received a 6.8% base salary increase for 2016, which brings hissalary into the market competitive range.

31

Annual Incentive Compensation.

Annual Incentive Targets. Annual incentive compensation focuses executive officers on ach-ieving annual earnings objectives and other performance objectives that are critical to AEP’s suc-cess. The HR Committee, in consultation with its independent compensation consultant and Com-pany management, establishes the annual incentive targets for each executive officer positionprimarily based on market competitive compensation for the executive’s position as shown in theindependent compensation consultant’s annual executive compensation study. For 2015, the HRCommittee established the following annual incentive targets for each of the positions held by thenamed executive officers:

• 125 percent of base earnings for the CEO (Mr. Akins);

• 80 percent of base earnings for the CFO (Mr. Tierney);

• 80 percent of base earnings for the EVP and Chief Operating Officer (Mr. Powers);

• 70 percent of base earnings for the EVP and General Counsel (Mr. Feinberg); and

• 60 percent of base earnings for the EVP-Energy Supply (Mr. Zebula).

Performance Score for Annual Incentive Plan. In 2015, AEP had operating earnings pershare of $3.69, which exceeded the upper end of our original operating earnings guidance for theyear of $3.40-$3.60 per share. This earnings result, together with the Company’s performance onthe measures discussed below (safety and strategic initiatives), produced a result of 182.2 percentof the target award opportunity for executive officers. The HR Committee also established two ex-tra credit goals for 2015, up to a 7.5 percent credit for zero fatalities and up to a 5 percent credit forcultural improvement. Although the Company did not experience a fatal employee accident in2015, management recommended and the HR Committee approved a 50 percent reduction in thezero fatality extra credit score due to two nearly fatal electrical contact incidents in 2015, whichresulted in a 3.8 percent addition to the score. In addition, the HR Committee consideredimprovement in the Company’s culture and employee engagement and awarded 5 percent for thismeasure. These positive adjustments increased the incentive funding to 191.0 percent of target for2015.

For 2015, GAAP earnings per share reported in AEP’s financial statements were $4.17. This is$0.48 per share higher than operating earnings, primarily due to the impact of the disposition ofour Commercial Barging Operations. Exhibit A to this proxy statement contains a reconciliation ofGAAP earnings per share to operating earnings per share.

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Annual Performance Objectives. For 2015, the HR Committee developed a balanced scorecard to tieannual incentive awards to the Company’s safety and strategic objectives for the year. The HR Committee usesthis balanced scorecard because it mitigates the risk that executives will focus on one or a few objectives, suchas short term financial performance, to the detriment of other objectives. The weightings of these measures andthe threshold, target and maximum payout levels are determined by the HR Committee and are set forth with2015 actual results and scores in the table below. We more fully explain the measures and the reasons we chosethe measures in the text following the table.

Weight Threshold Target Maximum

ActualPerformance

Result

ActualAwardScore

(as a percentof target

opportunity)Weighted

Score

Operating Earnings PerShare (75%) 75% $3.35 $3.50 $3.65 $3.69 200% 1.500

Safety (10%)Recordable Case Rate (the

number ofOccupational Safetyand HealthAdministrationrecordable incidentsper 200,000 workhours) 4% 0.90 0.79 0.69 0.759 131.0% 0.052

Severity Rate (the numberof lost and restrictedduty days due toOccupational Safetyand HealthAdministrationrecordable incidentsper 200,000 workhours) 5% 18.15 16.05 13.96 23.29 0% 0.000

Contractor RecordableCase Rate (the numberof Occupational Safetyand HealthAdministrationrecordable incidentsper 200,000 work hoursfor major AEPcontractors) 1% 1.61 1.4 1.19 1.29 152.4% 0.015

Strategic Initiatives (15%)Develop 2016 earnings

improvements 5%$15

million$165

million$280

million$229.9million 156.4% 0.078

Strategic assessment ofcompetitive businesses

2%

Not Applicable(This measure was

assessed subjectivelyby the HR Committee)

Completed ahead ofschedule enablingthe sale of AEP’sbarge operations 135% 0.027

Achieving incrementalrate relief 3%

$200million

$220million

$240million

>$240million 200% 0.060

Completion of data center

1%

Not Applicable(This measure was

assessed subjectivelyby the HR Committee)

Completed andrunning on time

100%(100% was the

maximumscore for this

measure) 0.010Network remediation

2%180,207 circuitfeet replaced

225,259 circuitfeet replaced

270,311 circuitfeet replaced

>270,311 circuitfeet replaced 200% 0.040

Launch transmissionasset health center byyear-end

1%Not Applicable (This measure was assessed

subjectively by the HR Committee)

Completed ahead ofschedule and

exceeded originalscope 200% 0.020

Complete transmissionoutage managementstrategy and system byyear-end 1%

Not Applicable(This measure was

assessed subjectivelyby the HR Committee)

Completed ahead ofschedule and

exceeded originalscope 200% 0.020

Additional Credit MeasuresFatality Adjustment

NA

+7.5% for completing theyear without a fatal work related

employee incident (subjectively reduced to halfthe available extra credit by the HR Committee)

No employeefatality +3.75% 0.038

Culture Adjustment based onimprovement in grand meanscore from Gallup survey NA

Up to +5% for improvement in AEP’s cultureand employee engagement

Improvementobjective exceeded +5% 0.05

Total Score 1.910

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Operating Earnings. The HR Committee chose operating earnings per share because it largelyreflects management’s performance in operating the Company. It is also strongly correlated withshareholder returns and is the primary measure by which the Company communicates its actualand expected future financial performance to the investment community and employees. Theoperating earnings per share measure is also well understood by both our shareholders andemployees. Management and the HR Committee believe that operating earnings per share growth isthe primary means for the Company to create long-term shareholder value.

Safety. With safety as an AEP core value, maintaining the safety of AEP employees and thegeneral public is always a primary consideration. Accordingly, safety measures comprised 10 per-cent of the 2015 scorecard. We measure employee and contractor recordable case rate for bothemployees and contractors in accordance with the methodology prescribed by the OccupationalSafety and Health Administration (OSHA) for recordable incidents. We measure the incident se-verity rate by the number of lost and restricted duty work days per 200,000 work hours. In addi-tion to these safety measures, the HR Committee also established a fatality credit adjustment for2015, which is discussed below.

Strategic Initiatives. Fifteen percent of the scorecard was tied to strategic initiatives for 2015.These initiatives included developing earnings improvements for future years, completing astrategic assessment of the Company’s competitive businesses, achieving incremental rate relief,completion of a data center, distribution network remediation, launching a transmission assethealth center and completing a transmission outage management strategy and system.

Fatality and Culture Adjustment Credits. The HR Committee established a fatality adjust-ment credit for 2015 that could add up to 7.5 percent to the total score in the event of a fatality freeyear. The HR Committee also established a culture and employee engagement credit for 2015 thatwould add up to 5 percent based on measurable improvement in these areas.

2015 Individual Award Calculations. The calculation of the 2015 annual incentive oppor-tunity is shown in the chart below for each named executive officer. This is the starting point fordetermining actual annual incentive awards. The HR Committee then subjectively evaluates theindividual performance of each named executive officer to determine the actual awards, which arealso shown in the table below and in the Non-Equity Incentive Plan column of the Summary Com-pensation Table for 2015.

Name

2015Base

Earnings*

AnnualIncentiveTarget %

FinalPerformance

Score

CalculatedAnnual

IncentiveOpportunity

2015 ActualAwards

Mr. Akins . . . . . . . . . . . . . . . . . . $1,273,796 x 125% x 191.0% = $3,041,188 $3,150,000

Mr. Tierney . . . . . . . . . . . . . . . . $ 706,102 x 80% x 191.0% = $1,078,924 $1,100,000

Mr. Powers . . . . . . . . . . . . . . . . . $ 706,102 x 80% x 191.0% = $1,078,924 $1,075,000

Mr. Feinberg . . . . . . . . . . . . . . . $ 588,463 x 70% x 191.0% = $ 786,775 $ 800,000

Mr. Zebula . . . . . . . . . . . . . . . . . $ 444,074 x 60% x 191.0% = $ 508,909 $ 570,000

* Based on salary paid in 2015, which is slightly different than the salary earned for 2015 shownin the Summary Compensation Table on page 44.

AEP provides annual incentive compensation to executive officers through the Senior OfficerIncentive Plan (SOIP), which was approved by shareholders at the 2012 annual meeting. The HRCommittee established 0.75 percent of income before discontinued operations, extraordinary itemsand the cumulative effect of accounting changes (Adjusted Income) as the performance measure forthe 2015 SOIP and further allocated a specific percentage of Adjusted Income to each executiveofficer. Actual payouts under the SOIP are based on the HR Committee’s consideration of perform-

34

ance factors and the exercise of negative discretion to reduce the maximum amount payable to anyindividual executive officer. In this way, the HR Committee retains the flexibility to make awardsthat are based on individual performance in a way that is consistent with the requirements underSection 162(m). For further information see discussion under Tax Considerations on page 41.

The HR Committee believes that annual incentive compensation should not be based purelyon a formulaic calculation, such as that shown in the Calculated Annual Incentive Opportunitycolumn above, but should instead be adjusted from this starting point to reflect each executive’sindividual performance and contribution. Based on recommendations from the CEO focusing onthe individual performance and contribution of the other named executive officers, the HRCommittee approved the annual incentive awards shown in the 2015 Actual Awards column. Theannual incentive award for the CEO was approved by the independent members of the Board.

Long-Term Incentive Compensation. The HR Committee grants long-term incentive compen-sation to executive officers on an annual award cycle. AEP annually reviews the mix of long-termincentive compensation provided to its executives. For the 2015 award cycle, 70 percent of thelong-term incentive grant date value was awarded as performance units and 30 percent of the grantdate value was awarded as time-vesting restricted stock units (RSUs).

The HR Committee establishes awards for each named executive officer position based primar-ily on a market competitive long-term and total compensation analysis provided by the HR Com-mittee’s independent compensation consultant for executives serving in similar positions in AEP’sCompensation Peer Group. Long-term incentive awards are approved by the HR Committee, or, forthe CEO, by the independent members of the Board. These determinations are made based on:

• Long-term incentive targets for each executive officer position primarily based on marketmedian compensation for the executive’s position as shown in the independent compensa-tion consultant’s annual executive compensation study;

• Award guidelines based on grade level for each named executive officer’s position, otherthan the CEO position, which are established by the HR Committee, which creates anaward pool that the HR Committee uses in determining awards for all positions except theCEO position;

• Individual performance assessments; and

• The executive officer’s future potential for advancement.

2015 Long-Term Incentive Awards

Name

Number ofPerformance

Units Granted(at Target)

Number ofRSUs Granted

TotalUnits Granted

TotalGrant DateFair Value

Mr. Akins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,352 34,008 113,360 $6,719,981Mr. Tierney . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,521 9,652 32,173 $1,907,216Mr. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,294 9,555 31,849 $1,888,008Mr. Feinberg . . . . . . . . . . . . . . . . . . . . . . . . . . 11,789 5,053 16,842 $ 998,394Mr. Zebula . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,581 15,201 25,782 $1,496,037

These performance units and RSUs provide total direct compensation opportunities to execu-tives that are based on market competitive data. Differences between the awards for individualexecutives primarily reflect differences in market median compensation for the executives asshown in the annual executive compensation study conducted by the HR Committee’s in-dependent compensation consultant which are then used to establish target awards for each gradelevel or individual executive. In December 2015, Mr. Zebula was also granted a one-time $600,019

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RSU award that will vest over a 40 month period for his work in leading the Company’s efforts inthe strategic assessment of its competitive businesses. Mr. Zebula successfully closed the Compa-ny’s sale of its competitive commercial barge transportation subsidiary, AEP River Operations,LLC, in November 2015 and is continuing to lead the Company’s efforts in its strategic review ofits competitive generation business. This award consisted of 10,667 RSUs that will vest over aforty month period, subject to his continued employment, in three approximately equal install-ments on May 1, 2017, May 1, 2018 and May 1, 2019.

Performance Units. The HR Committee granted 70 percent of the aggregate grant date valueof the Company’s 2015 long-term incentive awards as performance unit awards for the 2015 – 2017performance period. Each performance unit has an economic value equivalent to a share of AEPcommon stock. AEP grants performance units at the beginning of each year with a three-year per-formance and vesting period. Vested performance units are paid out in cash except to the extentthey are voluntarily deferred or are needed to meet an executive’s stock ownership requirement, inwhich case some or all of the vested performance units are mandatorily deferred into AEP CareerShares. AEP Career Shares are not paid to participants until after their employment with AEPends. AEP Career Shares are paid in cash.

Dividends are reinvested in additional performance units, but those additional performanceunits are subject to the same performance measures and vesting requirements as the underlyingperformance units on which they were granted. The total number of performance units held at theend of the performance period is multiplied by the equally weighted score for the two performancemeasures shown below to determine the number of performance units earned. Each unit is thenpaid out or deferred at the average closing price of AEP common stock for the last 20 trading daysof the performance period. The maximum score for each performance measure is 200 percent. Forfurther information on these awards, see the description under 2015 Stock Award Grants begin-ning on page 47. For the 2015-2017 performance units, the cumulative operating earnings per sharetarget was set at $10.95, which was a 6.8 percent increase over the prior three-year goal.

Performance Measures for 2015 – 2017 Performance Units

Performance Measure WeightThreshold

PerformanceTarget

PerformanceMaximum Payout

Performance

3-Year Cumulative Operating EarningsPer Share 50%

$10.184(30% payout)

$10.950(100% payout)

$11.717(200% payout)

3-Year Total ShareholderReturn vs. S&P 500 Electric Utilities

Industry Index 50%20th Percentile(0% payout)

50th Percentile(100% payout)

80th Percentile(200% payout)

The HR Committee selected a cumulative measure of operating earnings to ensure that earn-ings for all three years contribute equally to the award calculation. The HR Committee also se-lected a total shareholder return measure for these awards to provide an external performancecomparison that reflects the effectiveness of management’s strategic decisions and actions over thethree-year performance period relative to other large electric utilities.

Restricted Stock Units. Each RSU has an economic value equivalent to a share of AEP com-mon stock. The HR Committee granted 30 percent of the aggregate grant date value of the Compa-ny’s 2015 long-term incentive awards as RSUs. These RSUs vest over a forty month period, subjectto the executive’s continued employment, in three approximately equal installments on May 1,2016, May 1, 2017 and May 1, 2018. Dividends are reinvested in additional RSUs, but those addi-tional RSUs are subject to the same vesting requirements applicable to the underlying RSUs onwhich they were granted. Upon vesting, these RSUs pay out in cash to executive officers at theaverage closing price of AEP common stock for the last 20 trading days of the vesting period. TheHR Committee granted RSU awards to executive officers that pay out in cash because these execu-

36

tives have other means of meeting their stock ownership requirements and might otherwise beprevented from utilizing this compensation for extended periods of time due to restrictions on in-sider trading.

Stock Ownership Requirements. The HR Committee believes that linking a significant por-tion of an executive’s financial rewards to the Company’s success, as reflected by the value of AEPstock, gives the executive a stake similar to that of the Company’s shareholders and encourageslong-term management strategies that benefit shareholders. Therefore, the HR Committee requirescertain officers (54 individuals as of January 1, 2016), including the named executive officers, toaccumulate and hold a specific amount of AEP common stock or stock equivalents. The HR Com-mittee annually reviews the minimum stock ownership level for each executive officer andperiodically adjusts these levels. Each named executive officer met his or her stock ownershiprequirement as of March 1, 2016.

The CEO’s stock ownership target is five times his base salary, and the other named executiveofficers’ targets are three times their respective base salaries.

Equity Retention (Holding Period). Until an executive officer meets his or her minimumstock ownership requirement, performance units awarded under the Long-term Incentive Plan aremandatorily deferred into AEP Career Shares, to the extent necessary to meet the stock ownershiprequirement. AEP Career Shares cannot be exchanged to any other investment and must be held bythe executive until his or her employment with AEP ends. The named executive officers held thefollowing number of AEP Career Shares as of February 18, 2016: Mr. Akins, 102,504; Mr. Tierney,18,309; Mr. Powers, 51,492; Mr. Feinberg, 30,394; and Mr. Zebula, 27,854. In addition, in the eventthat an executive has not met his or her minimum stock ownership requirement within five yearsof the date it became effective or subsequently falls below it, the HR Committee may require theexecutive to defer a portion of his or her annual incentive compensation award into AEP CareerShares.

Benefits. AEP generally provides the same health and welfare benefits to named executiveofficers as it provides to other employees. AEP also provides the named executive officers witheither four or five weeks of paid vacation, depending on their length of service and position.

AEP’s named executive officers participate in the same tax-qualified defined benefit pensionplan and defined contribution savings plan as other eligible employees. AEP’s named executiveofficers also participate in the Company’s non-qualified retirement benefit plans, which largelyprovide “supplemental benefits” that would otherwise be offered through the tax-qualified plansexcept for the limits imposed by the Internal Revenue Code on those tax-qualified plans. This al-lows eligible employees to accumulate replacement income for their retirement based on the samebenefit formulas as the tax qualified plans but without the limitations that are imposed by the In-ternal Revenue Code on the tax-qualified plans.

The HR Committee recognizes that the non-qualified plans result in the deferral of the Compa-ny’s income tax deduction related to these benefits until such benefits are paid, but the HR Com-mittee believes that executives generally should be entitled to the same retirement benefits, as apercentage of their eligible pay, as other employees and that these benefits are prevalent amongsimilar companies. The HR Committee also provides these benefits as part of a market competitivetotal rewards package.

The HR Committee limits both the amount and types of compensation that are included in thequalified and non-qualified retirement plans because they believe that compensation over certainlimits and certain types of compensation should not be further enhanced by including it in retire-ment benefit calculations. Therefore:

• Long-term incentive compensation is not included in the calculations that determineretirement and other benefits under AEP’s benefit plans,

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• The cash balance formula of the AEP Supplemental Benefit Plan limits eligible compensa-tion to the greater of $1 million or twice the participant’s base salary, and

• Eligible compensation is also limited to $2 million under the non-qualified SupplementalRetirement Savings Plan.

AEP provides group term life insurance benefits to all employees, including the named execu-tive officers, in the amount of two times their base salary.

For executives whom the Company asks to relocate, it is AEP’s practice to offer relocation as-sistance to offset their moving expenses. This policy better enables AEP to obtain high quality newhires and relocate internal candidates. None of the named executive officers relocated during 2013,2014 or 2015.

Perquisites. The HR Committee annually reviews the perquisites provided by the Company.In 2015, AEP only provided independent financial counseling and tax preparation services to as-sist executives with financial planning and tax filings. Income is imputed to executives and taxesare withheld for these services.

While corporate aircraft provides enhanced security, travel flexibility and reduced travel time,which benefits the Company, the HR Committee is sensitive to concerns regarding the expense ofcorporate aircraft and the public perception regarding personal use of such aircraft. Accordingly,effective October 2009, the HR Committee generally prohibited personal use of corporate aircraftthat has an incremental cost to the Company. The Company allows personal travel on businesstrips using the corporate aircraft if there is no incremental cost to the Company. Income is imputedand taxes are withheld on the value of personal travel on corporate aircraft in accordance with IRSstandards.

Other Compensation Information

Recoupment of Incentive Compensation.

The Board believes that incentive compensation should be reimbursed to the Company if, inthe Board’s determination:

• Such incentive compensation was predicated upon the achievement of financial or otherresults that were subsequently materially restated or corrected,

• The executive from whom such reimbursement is sought engaged in misconduct thatcaused or partially caused the need for the restatement or correction, and

• A lower payment would have been made to the executive based upon the restated or cor-rected financial results.

The Board adopted this clawback policy in February 2007, and the HR Committee has directedthe Company to design and administer all of the Company’s incentive compensation programs in amanner that provides for the Company’s ability to obtain such reimbursement. The Company willseek reimbursement, if and to the extent that, in the Board’s view, such reimbursement is war-ranted by the facts and circumstances of the particular case or if the applicable legal requirementsimpose more stringent requirements on AEP to obtain reimbursement of such compensation. AEPmay also retain any deferred compensation previously credited to the executive if, when, and tothe extent that it otherwise would become payable. This right to reimbursement is in addition to,and not in substitution for, any and all other rights AEP might have to pursue reimbursement orsuch other remedies against an executive for misconduct in the course of employment by AEP orotherwise based on applicable legal considerations.

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Role of the CEO and Compensation Consultant in Determining Executive Compensation. TheHR Committee invites the CEO and all directors to attend HR Committee meetings. The HR Commit-tee regularly holds executive sessions without management present. The Chairman of the Board andthe Chair of the HR Committee have the authority to call meetings of the HR Committee.

The CEO has assigned AEP’s Senior Vice President & Chief Administrative Officer and AEP’sDirector – Compensation and Executive Benefits to support the HR Committee. These individualswork closely with the HR Committee Chairman, the CEO and the HR Committee’s independentcompensation consultant, Meridian Compensation Partners, LLC (Meridian), to research anddevelop requested information, prepare meeting materials, implement the HR Committee’s actionsand administer the Company’s executive compensation and benefit programs consistent with theobjectives established by the HR Committee. Meetings are held with the CEO, the HR CommitteeChairman and Meridian prior to HR Committee meetings to review and finalize the agenda andmeeting materials.

The CEO regularly discusses his strategic vision and direction for the Company during HRCommittee meetings with Meridian in attendance. Likewise, Meridian regularly discussescompensation strategy alternatives, in light of the CEO’s strategic vision and direction, during HRCommittee meetings with the CEO in attendance. The HR Committee believes that this open dia-logue and exchange of ideas is important to the development and implementation of a successfulexecutive compensation strategy.

The CEO discusses the individual performance of the named executive officers with the HRCommittee and recommends their compensation to the HR Committee. The CEO also has sub-stantial input into salary budgets and changes to incentive targets. The CEO also has substantialinput into the development of employment offers for outside candidates for executive positions,although the HR Committee must approve all employment offers for executive officers.

Change In Control Agreements. The HR Committee provides change in control agreements tospecified executives, including all the named executive officers, to help align the interests of theseexecutives with those of AEP’s shareholders by mitigating the financial impact that would occur tothem if their employment was terminated as a result of a change in control. The HR Committeealso considers change in control agreements as an important tool for attracting and retainingexecutives for some positions. The HR Committee limits participation to those executives whosefull support and sustained contributions would be needed during a lengthy and complex corporatetransaction.

While the HR Committee believes these agreements are consistent with the practices of itspeer companies, the most important reason for these agreements is to protect the Company and theinterests of shareholders in the event of an anticipated or actual change in control. During suchtransitions, retaining and continuing to motivate the Company’s key executives would be criticalto protecting shareholder value. In a change of control situation, outside competitors are morelikely to try to recruit top performers away from the Company, and our executive officers may con-sider other opportunities when faced with uncertainty about retaining their positions. Therefore,the HR Committee uses these agreements to provide security and protection to our officers in suchcircumstances for the long-term benefit of the Company and its shareholders.

The Board has adopted a policy that requires shareholder approval of future executive sev-erance agreements that provide benefits generally exceeding 2.99 times the sum of the namedexecutive officer’s salary plus annual incentive compensation. In consultation with its in-dependent compensation consultant, the HR Committee periodically reviews change in controlagreement practices of companies in our Compensation Peer Group. The HR Committee has foundthat change in control agreements are common among these companies, and that 2.99 or 3 multi-ples are the most common for named executive officers. Therefore, the HR Committee approved

39

change in control multiples of 2.99 times base salary and annual incentive compensation for eachof the named executive officers. Most of the other executives covered by change in control agree-ments have a lesser multiple of 2.0 times base salary and annual incentive compensation. All ofthe agreements have a “double trigger,” which means the severance payments and benefits wouldbe provided only upon a change in control accompanied by an involuntary termination or con-structive termination within two years after the change in control.

Effective January 1, 2014, the HR Committee replaced all of the Company’s change in controlagreements to eliminate a provision that provided a tax gross-up for excise taxes.

Long-term incentive compensation may also vest in the event of a change in control. In theevent an executive’s employment is terminated within one year after a change in control underqualifying conditions, such as by the Company without cause or by the executive for good reason,then a pro rata portion of the executive’s outstanding performance units will vest and be paid atthe target performance score. All outstanding RSU awards have a double trigger change in controlprovision.

Other compensation and benefits provided to executive officers in the event their employmentis terminated as a result of a change in control are consistent with that provided in the event anexecutive’s employment is terminated due to a consolidation, restructuring or downsizing as de-scribed below.

Other Employment Separations.

The Company has an Executive Severance Plan (Executive Severance Plan) that provides sev-erance benefits to selected officers of the Company, including the named executive officers, whoagree to its terms, including confidentiality, non-solicitation and non-disparagement obligations.Executives remain eligible for benefits under the general severance plan described below; however,any benefits provided under the Executive Severance Plan will be reduced by any amounts pro-vided under the general severance plan. Benefits for our named executive officers under theExecutive Severance Plan (which would be triggered by a good reason resignation or an in-voluntary termination), include pay continuation of two times their base salary and target annualincentive award payable over two years, and are conditioned on the executive officer’s release ofclaims against the Company and agreement not to compete with the Company for two years. Forfurther information on the Executive Severance Plan, see the description under Potential PaymentsUpon Termination of Employment or Change in Control beginning on page 58.

AEP also maintains a broad-based severance plan that provides two weeks of base pay per yearof service to all employees, including named executive officers, if their employment is terminateddue to a consolidation, restructuring or downsizing, subject to the employee’s agreement to waiveclaims against AEP. In addition, our severance benefits for all employees include outplacementservices and access to health benefits at active employee rates for up to 18 months (or until age 65for employees who are at least age 50 with 10 years of service at the time of their employmenttermination).

Named executive officers and other employees remain eligible for an annual incentive awardbased on their eligible pay for the year, which reflects the portion of the year that they worked, ifthey separate from service prior to year-end due to their retirement (on or after age 55 with at leastfive years of service). In the event of a participant’s death, this amount is paid to their estate.

A prorated portion of outstanding performance units vest if a participant retires, which is de-fined as a termination, other than for cause, after the executive reaches age 55 with five years ofservice or if a participant is severed. A prorated portion of outstanding performance units wouldalso vest to a participant’s heirs in the event of the participant’s death. The pro-rated performanceunits are not payable until the end of the performance period and remain subject to all theperformance objectives.

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In 2015, executive officers were also entitled to 12 months of continued financial counselingservice in the event they are severed from service as the result of a restructuring, consolidation ordownsizing. In the event of their death, their spouse or the executor of their estate would be eligi-ble for this benefit.

Insider Trading, Hedging and Pledging. The Company’s insider trading policy prohibits di-rectors and executive officers from hedging their AEP stock holdings through short sales and theuse of options, warrants, puts and calls or similar instruments. The policy also prohibits directorsand executive officers from pledging AEP stock as collateral for any loan.

Tax Considerations. Section 162(m) of the Internal Revenue Code (Section 162 (m)) limitsthe Company’s ability to deduct compensation in excess of $1,000,000 paid in any year to theCompany’s CEO or any of the next three highest compensated named executive officers other thanthe CFO. The HR Committee considers the limits imposed by Section 162(m) when designingcompensation and benefit programs. Because the annual incentive compensation awarded in 2015was performance-based and awarded by a committee of independent outside directors pursuant tothe Senior Officer Incentive Plan (the SOIP), which was approved by shareholders, it is consistentwith the requirements for tax deductibility by the Company under Section 162(m). In no case didthe annual incentive awards paid for 2015 exceed the maximum award provided under the SOIP.

Performance units, which were granted under the shareholder approved Long-Term IncentivePlan, are also consistent with the requirements for tax deductibility by the Company under Sec-tion 162(m). For the 2015-2017 performance period, the HR Committee established cumulative three-year income before discontinued operations, extraordinary items and the cumulative effect of ac-counting changes (Adjusted Income) as the performance measure with a threshold (0 percent) payoutat $1 billion and a maximum (200 percent) payout at $2.5 billion. Because these awards are based onan objective definition of earnings that was approved by shareholders as part of the long-term in-centive plan, they are consistent with the requirements for tax deductibility by the Company underSection 162(m). However, the HR Committee retains the discretion to reduce the payout.

AEP’s RSUs are not considered to be performance-based under Section 162(m). Therefore, anyamounts attributable to those RSUs are not tax deductible if and to the extent that such units causethe compensation of the covered named executive officer to exceed $1,000,000 for the year.

By meeting the requirements for performance based compensation under Section 162(m) forannual incentive compensation and performance units, these payments are potentially tax deduc-tible for the Company. However, no assurance can be given that awards intended by the HR Com-mittee to satisfy the requirements for qualified performance-based compensation under Sec-tion 162(m) will in fact do so. The HR Committee intends to continue to utilize shareholderapproved plans and performance based awards to allow the Company to deduct most annual andlong-term incentive compensation paid to named executive officers. The HR Committee may stillgrant awards that are not intended to constitute qualified performance-based compensation underSection 162(m) if the HR Committee determines that granting such awards is in the best interestsof the Company.

Finally, Section 409A of the Internal Revenue Code imposes additional taxes on named execu-tive officers whose deferred compensation fails to comply with Section 409A. The Company has re-viewed its compensation arrangements to help ensure they comply with applicable Section 409Arequirements.

Human Resources Committee ReportMembership and Independence. The Board has determined that each member of the HR

Committee is an independent director, as defined by the NYSE listing standards. Each member of

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the HR Committee is also a “non-employee director” for purposes of SEC Rule 16b-3 and an“outside director” for purposes of Section 162(m). Members of the HR Committee attend pro-fessional development training that addresses topics of specific relevance to public company com-pensation committees.

Purpose. The primary purpose of the HR Committee is to provide independent oversight ofthe compensation and human resources policies and practices of the Company. The primary ob-jective of the HR Committee with respect to executive compensation is to ensure that executiveofficers are compensated in a manner that is consistent with the Company’s business strategy, risktolerance, competitive practices, internal equity considerations, and Company and Board policies.

Functions and Process. The HR Committee operates under a written charter reviewed annu-ally by the Board. This charter is available on AEP’s website at www.aep.com/investors/corporateleadersandgovernance.

The HR Committee annually reviews AEP’s executive compensation in the context of the per-formance of management and the Company. The HR Committee reviews and approves thecompensation for all executive officers, other than the CEO, and other senior officers. With respect tothe compensation of the CEO, the HR Committee is responsible for making compensation recom-mendations to the independent members of the Board, who review and approve the CEO’scompensation.

In carrying out its responsibilities, the HR Committee addressed many aspects of AEP’s humanresource and executive compensation programs and practices in 2015, including:

• Establishing annual and long-term performance objectives for executive officers;

• Assessing the performance of the CEO, other executive officers and the Company relativeto those established performance objectives;

• Conducting an evaluation of the CEO based on written comments from board members,senior AEP management, and the audit firm partner overseeing AEP’s external audit;

• Determining the mix of base salary, annual incentive compensation and long-term equitybased compensation for executive officers;

• Assessing the competitiveness of 2015 and proposed 2016 target compensation for all exec-utive officers relative to AEP’s Compensation Peer Group;

• Determining the mix of performance units and RSUs issued as long-term incentive awards;

• Reviewing and approving the base salaries, annual incentive awards and long-term in-centive award opportunities for 24 officers;

• Assessing compensation risk;

• Reviewing and approving change in control agreements;

• Reviewing the Company’s workforce safety efforts and results;

• Reviewing the senior management succession and development plans; and

• Reviewing and approving reports to shareholders regarding executive compensation.

In establishing performance objectives, the HR Committee considers the interests of other majorAEP stakeholders, such as AEP’s customers, employees, and the communities in which AEP oper-ates, in addition to those of AEP’s shareholders. For example, the HR Committee tied 2015 annualincentive compensation for all executive officers to measures that included employee safety, whilealso tying funding for annual incentive compensation to AEP’s operating earnings per share.

42

In determining executive compensation, the HR Committee considers all relevant factors, includ-ing:

• Company performance;

• The CEO’s individual performance, based, in part, on a leadership assessment that specifi-cally covers integrity and ethics, communication, willingness to confront tough issues,business acumen, strategic planning, teamwork, and fostering a high performance culture;

• Individual performance and compensation recommendations for the other named execu-tive officers as assessed by their direct manager;

• Market competitive compensation survey information from the executive compensationstudy conducted by the HR Committee’s independent compensation consultant;

• Succession planning;

• Executive retention;

• The responsibilities and experience of each executive officer;

• Compensation history;

• The impact salary changes may have on other elements of total rewards;

• The impact of compensation on risk taking; and

• The expense implications of any changes.

The HR Committee’s Independent Compensation Consultant. The HR Committee engagedMeridian to provide recommendations to the HR Committee regarding AEP’s executive compensa-tion and benefit programs and practices. The HR Committee is authorized to retain and terminateconsultants and advisors without management approval and has the sole authority to approve theirfees. Among other assignments, the HR Committee’s independent compensation consultant pro-vides an annual executive compensation study and a report on current executive compensationand benefits trends within the electric utility industry.

The HR Committee annually assesses and discusses the independence of its executive compen-sation consultant. Meridian did not provide any services to AEP, other than the work it performedfor the HR Committee, and the work it performed for the Committee on Directors and CorporateGovernance on director compensation. The HR Committee concluded that Meridian was in-dependent and that there was no conflict of interest.

The HR Committee also annually assesses the performance and objectivity of its executivecompensation consultant and has found that the advice provided by Meridian was of a high qual-ity, objective and appropriate for the Company. The HR Committee regularly holds executive ses-sions with Meridian to help ensure that they receive full and independent advice.

In fulfilling its oversight responsibilities, the HR Committee reviewed and discussed with man-agement the Compensation Discussion and Analysis set forth in this proxy statement. Based on itsreview and these discussions, the HR Committee recommended to the Board that the CompensationDiscussion and Analysis be included in this proxy statement and incorporated by reference into theCompany’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

Human Resources Committee Members

Ralph D. Crosby, Jr., ChairThomas E. HoaglinRichard C. NotebaertStephen S. RasmussenOliver G. Richard, III

43

Executive CompensationSummary Compensation Table

The following table provides summary information concerning compensation earned by ourChief Executive Officer, our Chief Financial Officer and the three other most highly compensatedexecutive officers, to whom we refer collectively as the named executive officers.

Name and PrincipalPosition Year

Salary($)(1)

Bonus($)

StockAwards

($)(2)

Non-Equity

IncentivePlan

Compen-sation($)(3)

Change inPensionValue

and Non-qualifiedDeferredCompen-

sationEarnings

($)(4)

AllOther

Compen-sation($)(5)

Total($)

Nicholas K. Akins— 2015 1,279,900 — 6,719,981 3,150,000 199,027 103,658 11,452,566Chairman of the Board andChief Executive Officer

2014 1,240,754 — 6,720,019 2,950,000 359,787 102,960 11,373,5202013 1,204,615 — 6,720,167 2,430,000 155,741 102,065 10,612,588

Brian X. Tierney— 2015 709,246 — 1,907,216 1,100,000 0 84,125 3,800,587Executive Vice President andChief Financial Officer

2014 695,339 — 1,881,251 1,050,000 269,994 82,448 3,979,0322013 675,086 — 1,893,044 875,500 0 77,689 3,521,319

Robert P. Powers— 2015 709,246 — 1,888,008 1,075,000 0 90,234 3,762,488Executive Vice President andChief Operating Officer

2014 695,339 — 1,881,251 1,012,000 746,589 82,706 4,417,8852013 675,086 — 1,893,044 875,500 0 78,184 3,521,814

David M. Feinberg— 2015 591,426 — 998,394 800,000 59,069 68,163 2,517,052Executive Vice President andGeneral Counsel

2014 568,679 — 962,482 675,000 69,384 63,293 2,338,8382013 552,115 — 1,050,302 585,000 36,057 55,309 2,278,783

Charles E. Zebula— 2015 446,310 — 1,496,037 570,000 51,420 54,279 2,618,046Executive Vice President-Energy Supply

2014 429,144 — 815,509 510,000 193,452 48,419 1,996,524

(1) Amounts in the salary column are composed of executive salaries earned for the year shown, which include 261 days ofpay for 2015. This is one day more than the standard 260 calendar work days and holidays in a year.

(2) The amounts reported in this column reflect the aggregate grant date fair value, calculated in accordance with FASBASC Topic 718, of performance units and RSUs granted under our Long-Term Incentive Plan. See Note 15 to the Con-solidated Financial Statements included in our Form 10-K for the year ended December 31, 2015 for a discussion of therelevant assumptions used in calculating these amounts. With respect to the performance units, the estimates of thegrant date fair values determined in accordance with FASB ASC Topic 718 assumes the vesting of 100% of theperformance units awarded. The value realized for the performance units, if any, will depend on the Company’s per-formance during a three-year performance and vesting period. The potential payout can range from 0 percent to 200percent of the target number of performance units, plus any dividend equivalents. Therefore, the maximum amountpayable for the 2015 performance units is equal to $9,407,974 for Mr. Akins; $2,670,090 for Mr. Tierney; $2,643,176 forMr. Powers; $1,397,704 for Mr. Feinberg and $1,254,484 for Mr. Zebula; and the maximum amount payable for the 2014performance units is equal to $9,408,054 for Mr. Akins, $2,633,798 for Messrs. Powers and Tierney, $1,347,502 forMr. Feinberg and $1,141,722 for Mr. Zebula. The 2013 performance units vested on December 31, 2015 and are shownin the Option Exercises and Stock Vested for 2015 table. The RSUs vest over a forty month period. For further in-formation on these awards, see the Grants of Plan-Based Awards for 2015 table on page 46 and the Outstanding EquityAwards at Fiscal Year-End for 2015 table on page 48.

(3) The amounts shown in this column are annual incentive compensation paid under the Senior Officer Incentive Plan forthe year shown. At the outset of each year, the HR Committee sets annual incentive targets and performance criteriathat are used after year-end to determine if and the extent to which executive officers may receive annual incentiveaward payments under this plan.

(4) The amounts shown in this column are attributable to the increase in the actuarial values of each of the named executiveofficer’s combined benefits under AEP’s qualified and non-qualified defined benefit plans determined using interest rateand mortality assumptions consistent with those used in the Company’s financial statements. See the Pension Benefitsfor 2015 table on page 51, and related footnotes for additional information. See Note 8 to the Consolidated FinancialStatements included in our Form 10-K for the year ended December 31, 2015 for a discussion of the relevant assump-tions. None of the named executive officer received preferential or above-market earnings on deferred compensation. Theactual change in pension value in 2015 for Mr. Tierney was ($21,664) and for Mr. Powers was ($701,968).

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(5) Amounts shown in the All Other Compensation column for 2015 include: (a) Company contributions to the Company’sRetirement Savings Plan, (b) Company contributions to the Company’s Supplemental Retirement Savings Plan and(c) perquisites. The amounts are listed in the following table:

TypeNicholas K.

AkinsBrian X.Tierney

Robert P.Powers

David M.Feinberg

CharlesE. Zebula

Retirement Savings Plan Match . . . . . . . . . . . . . . $ 11,687 $11,925 $11,925 $11,925 $11,925Supplemental Retirement Savings Plan

Match . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 78,075 $67,100 $65,390 $44,931 $31,008Perquisites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,896 $ 5,100 $12,919 $11,307 $11,346Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $103,658 $84,125 $90,234 $68,163 $54,279

Perquisites provided in 2015 included: financial counseling and tax preparation services, and, for Mr. Akins, director’saccidental death insurance premium. Executive officers may also have the occasional personal use of event ticketswhen such tickets are not being used for business purposes, however, there is no associated incremental cost. Fromtime to time executive officers may receive customary gifts from third parties that sponsor sporting events (subject toour policies on conflicts of interest).

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Grants of Plan-Based Awards for 2015

The following table provides information on plan-based awards granted in 2015 to each of ournamed executive officers.

NameGrantDate

Estimated FuturePayouts Under Non-EquityIncentive Plan Awards(1)

Estimated FuturePayouts Under

Equity Incentive PlanAwards(3)

All OtherStock

Awards:Number ofShares ofStock or

Units(#)(6)

Grant DateFair

Value ofStock and

OptionAwards

($)(7)Threshold

($)Target

($)Maximum

($)(2)Threshold

(#)(4)Target

(#)Maximum

(#)(5)

Nicholas K. Akins2015 Senior Officer Incentive

Plan . . . . . . . . . . . . . . . . . . . . . . . — 1,592,245 3,980,6132015 – 2017 Performance

Units . . . . . . . . . . . . . . . . . . . . . . 2/24/15 11,903 79,352 158,704 4,703,987Restricted Stock Units . . . . . . . . . 2/24/15 34,008 2,015,994

Brian X. Tierney2015 Senior Officer Incentive

Plan . . . . . . . . . . . . . . . . . . . . . . . — 564,882 1,412,2052015 – 2017 Performance

Units . . . . . . . . . . . . . . . . . . . . . . 2/24/15 3,378 22,521 45,042 1,335,045Restricted Stock Units . . . . . . . . . 2/24/15 9,652 572,171

Robert P. Powers2015 Senior Officer Incentive

Plan . . . . . . . . . . . . . . . . . . . . . . . — 564,882 1,412,2052015 – 2017 Performance

Units . . . . . . . . . . . . . . . . . . . . . . 2/24/15 3,344 22,294 44,588 1,321,588Restricted Stock Units . . . . . . . . . 2/24/15 9,555 566,420

David M. Feinberg2015 Senior Officer Incentive

Plan . . . . . . . . . . . . . . . . . . . . . . . — 411,924 1,029,8102015 – 2017 Performance

Units . . . . . . . . . . . . . . . . . . . . . . 2/24/15 1,768 11,789 23,578 698,852Restricted Stock Units . . . . . . . . . 2/24/15 5,053 299,542

Charles E. Zebula2015 Senior Officer Incentive

Plan . . . . . . . . . . . . . . . . . . . . . . . — 266,444 666,1102015 – 2017 Performance

Units . . . . . . . . . . . . . . . . . . . . . . 2/24/15 1,587 10,581 21,162 627,242Restricted Stock Units . . . . . . . . . 2/24/15 4,534 268,776Restricted Stock Units . . . . . . . . . 12/7/15 10,667 600,019

(1) Represents potential payouts under the Senior Officer Incentive Plan (SOIP), which are based on base earnings paidduring the year.

(2) The amounts shown in this column represent 250 percent of the target award for each of the named executive officers.(3) Represents performance units awarded under our Long-Term Incentive Plan for the 2015-2017 performance period.

These awards generally vest at the end of the three year performance period based on our attainment of specified per-formance measures. For further information on these awards, see the description under 2015 Stock Award Grants be-low. The number of performance units does not include additional units that may accrue due to dividend credits.

(4) The amounts shown in the Threshold column represent 15% of the target award for each of the named executive offi-cers because the Operating Earnings Per Share measure has a 30% payout for threshold performance, the Total Share-holder Return measure has a 0% payout for threshold performance and these measures are equally weighted. However,the Operating Earnings Per Share threshold does not guarantee a minimum payout because the score would be 0% oftarget if threshold performance is not achieved.

(5) The amounts shown in this column represent 200 percent of the target award for each of the named executive officers.(6) Represents restricted stock units awarded under the Long-Term Incentive Plan. These awards generally vest in three

equal installments on May 1, 2016, May 1, 2017 and May 1, 2018. The number of restricted stock units does not includeadditional units that may accrue due to dividend credits. The award granted on December 7, 2015 to Mr. Zebula gen-erally vests in three equal installments on May 1, 2017, May 1, 2018 and May 1, 2019.

(7) Amount represents the grant date fair value of performance units and RSUs measured in accordance with FASB ASCTopic 718, utilizing the assumptions discussed in Note 15 to our consolidated financial statements for the fiscal yearended December 31, 2015, without taking into account estimated forfeitures. With respect to performance units, thegrant date fair value assumes the target number of performance units granted will vest. The actual number of perform-ance units earned will depend on AEP’s performance over the 2015 through 2017 period, which could vary from 0 per-cent to 200 percent of the target award plus dividend credits. The value of performance units earned will be equal toAEP’s average closing share price for the last 20 trading days of the performance period multiplied by the number ofperformance units earned.

46

Narrative Disclosure to Summary Compensation Table and Grants of Plan-BasedAwards Table

2015 Stock Award Grants. Effective February 24, 2015, the named executive officers weregranted long-term incentive awards as part of AEP’s regular annual grant cycle. These awards weregranted with double trigger change in control provisions that provide early vesting of awards inthe event of a change in control and a covered separation from service. Of these awards, 70 percentwere granted in the form of performance units for the 2015-2017 three-year performance periodthat generally vest, subject to the participant’s continued AEP employment, at the end of the per-formance period. Performance units are generally equivalent in value to shares of AEP commonstock. Dividend equivalents are reinvested in additional performance units with the same vestingconditions as the underlying performance units.

The 2015-2017 performance units, including the dividend credits, are subject to two equallyweighted performance measures for the three-year performance period, which are:

• Three-year total shareholder return relative to the S&P 500 Electric Utilities Industry Index,and

• Three-year cumulative operating earnings per share relative to a performance objective es-tablished by the HR Committee.

These performance measures are described in detail in Compensation Discussion andAnalysis-Performance Units beginning on page 36. The scores for these performance measures de-termine the percentage of the performance units earned at the end of the performance period andcan range from zero percent to 200. Generally, recipients must remain employed by AEP throughthe end of the vesting period to receive a payout. For further information, see Potential PaymentsUpon Termination of Employment or Change in Control beginning on page 56.

The remaining 30 percent of AEP’s long-term incentive awards were granted in the form ofRSUs that generally vest, subject to the executive officer’s continued employment, in three equalinstallments on May 1, 2016, May 1, 2017 and May 1, 2018. Generally, recipients must remainemployed by AEP through the vesting date to receive a payout for the RSUs that vest on such date.Upon vesting, the RSUs pay out in cash to executive officers. For further information, see PotentialPayments Upon Termination of Employment or Change in Control beginning on page 56.

Mr. Zebula was also granted a one-time RSU award in December 2015 for his work in leadingthe Company’s efforts in the strategic assessment of its competitive businesses. He was awarded10,667 RSUs that will generally vest over a forty month period, subject to his continued employ-ment, in three approximately equal installments on May 1, 2017, May 1, 2018 and May 1, 2019.

Employment Agreements.

Mr. Powers has an agreement with the Company, which credits him with 17 additional yearsof service under AEP’s Supplemental Benefit Plan. In 1997, the Company granted additional yearsof credited service to Mr. Powers when he joined AEP to offset pension benefits that he wouldhave been able to earn from his prior employer due to his length of service at that company. Forfurther information on this, see note (2) under Pension Benefits for 2015 on page 51.

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Outstanding Equity Awards at Fiscal Year-End for 2015

The following table provides information with respect to holdings of restricted stock units andperformance units by the named executive officers at December 31, 2015. The named executiveofficers do not have any outstanding stock options.

Stock Awards

Name

Number ofShares orUnits of

Stock ThatHave NotVested (#)

MarketValue of

Shares orUnits ofStockThat

Have NotVested

($)

Equity IncentivePlan Awards:

Number ofUnearned

Shares, Unitsor Other

Rights ThatHave

Not Vested(#)

Equity IncentivePlan Awards:

Market orPayout Valueof Unearned

Shares,Units or

Other RightsThat Have NotVested ($)(1)

Nicholas K. Akins2014 – 2016 Performance Units(2) . . . . . . . . . . . 110,090 12,829,8892015 – 2017 Performance Units(2) . . . . . . . . . . . 82,538 9,618,9792013 Restricted Stock Units(3) . . . . . . . . . . . . . . 16,191 943,4502014 Restricted Stock Units(4) . . . . . . . . . . . . . . 31,454 1,832,8252015 Restricted Stock Units(5) . . . . . . . . . . . . . . 35,373 2,061,185

Brian X. Tierney2014 – 2016 Performance Units(2) . . . . . . . . . . . 30,820 3,591,7632015 – 2017 Performance Units(2) . . . . . . . . . . . 23,425 2,729,9502013 Restricted Stock Units(3) . . . . . . . . . . . . . . 4,561 265,7692014 Restricted Stock Units(4) . . . . . . . . . . . . . . 8,805 513,0672015 Restricted Stock Units(5) . . . . . . . . . . . . . . 10,040 585,031

Robert P. Powers2014 – 2016 Performance Units(2) . . . . . . . . . . . 30,820 3,591,7632015 – 2017 Performance Units(2) . . . . . . . . . . . 23,189 2,702,4462013 Restricted Stock Units(3) . . . . . . . . . . . . . . 4,561 265,7692014 Restricted Stock Units(4) . . . . . . . . . . . . . . 8,805 513,0672015 Restricted Stock Units(5) . . . . . . . . . . . . . . 9,939 579,146

David M. Feinberg2014 – 2016 Performance Units(2) . . . . . . . . . . . 15,768 1,837,6032015 – 2017 Performance Units(2) . . . . . . . . . . . 12,262 1,429,0132013 Restricted Stock Units(3) . . . . . . . . . . . . . . 2,281 132,9142014 Restricted Stock Units(4) . . . . . . . . . . . . . . 4,505 262,5062015 Restricted Stock Units(5) . . . . . . . . . . . . . . 5,256 306,267

Charles E. Zebula2014 – 2016 Performance Units(2) . . . . . . . . . . . 13,360 1,556,9742015 – 2017 Performance Units(2) . . . . . . . . . . . 11,006 1,282,6392013 Restricted Stock Units(3) . . . . . . . . . . . . . . 2,005 116,8312014 Restricted Stock Units(4) . . . . . . . . . . . . . . 3,818 222,4752015 Restricted Stock Units(5) . . . . . . . . . . . . . . 4,716 274,801Restricted Stock Units(6) . . . . . . . . . . . . . . . . . . . 10,667 621,566

(1) Pursuant to applicable SEC rules, the market value of the performance units reported in this column wascomputed by multiplying the closing price of AEP’s common stock on December 31, 2015 ($58.27) by themaximum number of performance units issuable (200% of the target amount set forth in the precedingcolumn) because the results for 2015 were above target for the performance units. However, the actualnumber of performance units credited upon vesting will be based on AEP’s actual performance over theapplicable three year period.

(2) AEP currently grants performance units at the beginning of each year with a three-year performance andvesting period. This results in awards for overlapping successive three-year performance periods. Theseawards generally vest at the end of the three year performance period. The performance units awarded forthe 2013 – 2015 performance period, including associated dividend credits, vested at December 31, 2015and are shown in the Options Exercises and Stock Vested for 2015 table below. The awards shown for the2014 – 2016 and 2015 – 2017 performance periods include performance units resulting from reinvesteddividends which are subject to the same performance criteria.

(3) Amounts include RSUs resulting from reinvested dividends. They will generally vest, subject to theexecutive officer’s continued employment, on May 1, 2016. These RSUs were granted on February 26,2013.

48

(4) Amounts include RSUs resulting from reinvested dividends. They will generally vest, subject to theexecutive officer’s continued employment, in two equal installments, on May 1, 2016 and May 1, 2017.These RSUs were granted on December 10, 2013.

(5) These RSUs were granted on February 24, 2015 and include restricted stock units resulting from re-invested dividends. They will generally vest, subject to the executive officer’s continued employment, inthree equal installments, on May 1, 2016, May 1, 2017 and May 1, 2018.

(6) These RSUs were granted on December 7, 2015. They will generally vest, subject to Mr. Zebula’s con-tinued employment, in three equal installments, on May 1, 2017, May 1, 2018 and May 1, 2019.

49

Option Exercises and Stock Vested for 2015

The following table provides information with respect to the vesting of RSUs and performanceunits granted to our named executive officers. The named executive officers did not exercise anystock options in 2015.

Option Awards Stock Awards

Name

Numberof SharesAcquired

onExercise

(#)

ValueRealized

onExercise

($)

Numberof SharesAcquired

onVesting(#)(1)

ValueRealized

onVesting ($)

(2)

Nicholas K. Akins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 264,940 15,357,817Brian X. Tierney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 89,156 5,154 ,879Robert P. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 89,156 5,154 ,879David M. Feinberg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 35,926 2,083,758Charles E. Zebula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 31,407 1,821,820

(1) This column includes the following performance units and related dividend equivalents for the2013 – 2015 performance period that vested on December 31, 2015: 199,817 for Mr. Akins;56,288 for Mr. Tierney; 56,288 for Mr. Powers; 28,144 for Mr. Feinberg; and 24,741 forMr. Zebula. This column also includes the following RSUs that vested on May 1, 2015: 47,954 forMr. Akins; 15,699 for Mr. Tierney; 15,699 for Mr. Powers; 7,782 for Mr. Feinberg; 6,666 forMr. Zebula. This column also includes 17,169 RSUs that vested on August 3, 2015 for Messrs.Akins, Powers and Tierney.

(2) As is required, the value included in this column for the 2013-2015 performance units is com-puted by multiplying the number of units by the closing price of AEP’s common stock on thevesting date of December 31, 2015 ($58.27). However, the actual value realized from these unitswas based on the 20-day average closing market price of AEP common stock prior to the vestingdate ($56.736). 166 of Mr. Feinberg’s vested performance units ($9,673 of the value set forth inthe table) were deferred into AEP Career Shares on February 12, 2016. For a description of AEPCareer Shares, see discussion under Stock Ownership Requirement Plan on page 55. This col-umn also includes the value of RSUs that vested on May 1, 2015 and August 3, 2015, which hada market value of $57.03 per share and $57.06 per share (the closing price of AEP’s commonstock on the vesting date), respectively.

2013 – 2015 Performance Units

Performance units that were granted for the 2013 – 2015 performance period vested on De-cember 31, 2015. The combined score for the 2013-2015 performance period was 176.3 percent oftarget. The final score calculation for these performance measures is shown in the chart below.

Performance MeasuresThreshold

PerformanceTarget

Performance

MaximumPayout

PerformanceActual

Performance Score WeightWeighted

Score

3-Year CumulativeEarnings Per Share

$8.85(30% payout)

$9.833(100% Payout)

$10.816(200% Payout) $10.349 152.5%50% 76.3%

3-Year TotalShareholder Return vs.S&P Electric Utilities

20th

Percentile(0% Payout)

50th

Percentile(100% Payout)

80th

Percentile(200% Payout)

83rdPercentile 200.0%50% 100.0%

Composite Result 176.3%

50

Pension Benefits for 2015

The following table provides information regarding the pension benefits for our named execu-tive officers under AEP’s pension plans. The material terms of the plans are described followingthe table.

Name Plan Name

Number ofYears

CreditedService (#)

Present Valueof

AccumulatedBenefit($)(1)

PaymentsDuring

LastFiscal

Year($)

Nicholas K Akins . . . . . . . . . AEP Retirement Plan 33.6 542,032 —CSW Executive Retirement Plan 33.6 1,077,787 —

Brian X. Tierney . . . . . . . . . . AEP Retirement Plan 17.6 293,374 —AEP Supplemental Benefit Plan 17.6 914,829 —

Robert P. Powers . . . . . . . . . AEP Retirement Plan 17.4 580,273 —AEP Supplemental Benefit Plan 34.4 (2) 3,588,825 —

David M. Feinberg . . . . . . . . AEP Retirement Plan 4.7 61,271 —AEP Supplemental Benefit Plan 4.7 146,353 —

Charles E. Zebula . . . . . . . . . AEP Retirement Plan 17.7 436,533 —AEP Supplemental Benefit Plan 17.7 738,360 —

(1) The Present Value of Accumulated Benefits is based on the benefit accrued under the appli-cable plan through December 31, 2015, and the following assumptions (which are consistentwith those used in AEP’s financial statements):

• The named executive officer retires at age 65 (or, for Mr. Tierney, Mr. Powers andMr. Zebula retires at age 62), and commences the payment of benefits (the “accruedbenefit”).

• The value of the annuity benefit at the named executive officer’s assumed retirement age isdetermined based upon the accrued benefit, an assumed interest rate of 4.30 percent, 4.05percent and 4.05 percent for the benefits accrued under the AEP Retirement Plan, AEPSupplemental Benefit Plan and the CSW Executive Retirement Plan, respectively, and as-sumed mortality based upon modified versions of the RP-2014 mortality tables. The valueof the lump sum benefit at that assumed retirement age is determined based upon the ac-crued benefit, an assumed interest rate of 4.50 percent and assumed mortality based on the2015 IRS Applicable Mortality table. The present value of both the annuity benefit and thelump sum benefit at each executive’s current age is based upon an assumed interest rate of4.30 percent, 4.05 percent and 4.05 percent for the benefits accrued under the AEP Retire-ment Plan, AEP Supplemental Benefit Plan and CSW Executive Retirement Plan, re-spectively.

• For the AEP Retirement Plan, the present value of the accrued benefit is weighted based on75 percent lump sum and 25 percent annuity (or 40 percent lump sum and 60 percentannuity for Mr. Powers and Mr. Zebula due to their eligibility for early retirement underthe final average pay benefit formula), based on the assumption that participants electthose benefit options in that proportion. For the AEP Supplemental Benefit Plan and theCSW Executive Retirement Plan, the present value of the accrued benefits is weightedbased on 100 percent lump sum.

(2) Mr. Powers has a letter agreement with AEP that credits him with years of service in additionto his actual years of service with AEP. Pursuant to that agreement, the Company credited 17additional years of service to Mr. Powers when he joined AEP in 1997 to offset pension bene-fits that he would have been able to earn from his prior employer due to his length of serviceat that company. The additional years of service credit have augmented the present value ofhis accumulated benefits under the AEP Supplemental Benefit Plan by $2,123,760.

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Overview. AEP maintains tax-qualified and nonqualified defined benefit pension plans foreligible employees. The nonqualified plans provide (i) benefits that cannot be paid under the tax-qualified plan because of maximum limitations imposed on such plans by the Internal RevenueCode and (ii) benefits pursuant to individual agreements with one of the named executive officers(Mr. Powers). The plans are designed to provide a retirement income to executives and theirspouses, as well as a market competitive benefit opportunity as part of a market competitive totalrewards package.

AEP Retirement Plan. The AEP Retirement Plan is a tax-qualified defined benefit pensionplan under which benefits are generally determined by reference to a cash balance formula. TheAEP Retirement Plan also encompasses the Central and South West Corporation Cash Balance Re-tirement Plan (the “CSW Retirement Plan”), which was merged into the AEP Retirement Planeffective December 31, 2008. As of December 31, 2015, each of the named executive officers wasvested in their AEP Retirement Plan benefit.

In addition, employees who have continuously participated in the AEP Retirement Plan (butnot the CSW Retirement Plan) since December 31, 2000 (“Grandfathered AEP Participants,” whichincludes Mr. Tierney, Mr. Powers and Mr. Zebula) remain eligible for an alternate pension benefitcalculated by reference to a final average pay formula. The benefits under this final average payformula were frozen as of December 31, 2010.

Cash Balance Formula. Under the cash balance formula, each participant has an account es-tablished to which dollar credits are allocated each year.

1. Company Credits. Each year, participants’ accounts are credited with an amount equal toa percentage of their salary for that year and annual incentive award for the prior year.The applicable percentage is based on the participant’s age and years of service. The fol-lowing table shows the applicable percentage:

Sum of Age PlusYears of Service

ApplicablePercentage

Less than 30 . . . . 3.0%30-39 . . . . . . . . . . 3.5%40-49 . . . . . . . . . . 4.5%50-59 . . . . . . . . . . 5.5%60-69 . . . . . . . . . . 7.0%70 or more . . . . . 8.5%

Each year, the IRS calculates a limit on the amount of eligible pay that can be used tocalculate pension benefits in a qualified plan. For 2015, the limit was $265,000.

2. Interest Credits. All amounts in the cash balance accounts earn interest at the averageinterest rate on 30-year Treasury securities for the month of November of the prior year,with a floor of 4 percent. For 2015, the interest rate was 4 percent.

Final Average Pay Formula. Grandfathered AEP Participants receive their benefits under thecash balance formula or the final average pay formula, whichever provides the higher benefit. OnDecember 31, 2010, the final average pay benefit payable at the Grandfathered AEP Participant’snormal retirement age was frozen, meaning that their final average pay formula benefit is not af-fected by the participant’s service or compensation subsequent to this date. This frozen final aver-age pay normal retirement benefit is based on the following calculation as of December 31, 2010:the participant’s then years of service times the sum of (i) 1.1 percent of the participant’s then high36 consecutive months of base pay (“High 36”); plus (ii) 0.5 percent of the amount by which theparticipant’s then High 36 exceeded the participant’s applicable average Social Security coveredcompensation.

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Grandfathered AEP Participants may become entitled to a subsidized benefit under the finalaverage pay formula if they would retire early (that is, once they have remained employed past age55 with at least three years of service). The benefit payable under the final average pay formulawould be unreduced if it commences at age 62 or later and is reduced by 3 percent for each yearprior to age 62 that the benefits are commenced. Mr. Powers and Mr. Zebula are eligible for suchearly retirement benefits.

AEP Supplemental Benefit Plan. The AEP Supplemental Benefit Plan is a nonqualified de-fined benefit pension plan. It generally provides eligible participants with benefits that are in ex-cess of those provided under the AEP Retirement Plan (without regard to the provisions now in-cluded as the result of the merger of the CSW Retirement Plan into the AEP Retirement Plan) asdetermined upon the participant’s termination of employment. These excess benefits are calcu-lated under the terms of the AEP Retirement Plan described above with the following mod-ifications: (i) additional years of service or benefit credits are taken into account; (ii) annual in-centive pay was taken into account for purposes of the frozen final average pay formula; and(iii) the limitations imposed by the Internal Revenue Code on annual compensation and annualbenefits are disregarded. However, eligible pay taken into account under the cash balance formulais limited to the greater of $1 million or two times the participant’s year-end base salary.

Mr. Powers negotiated 17 additional years of service under the AEP Supplemental BenefitPlan when he joined the Company in 1997 to offset pension benefits that he would have been ableto earn from his prior employer due to his length of service at that company.

Participants do not become vested in their AEP Supplemental Plan benefit until they becomevested in their AEP Retirement Plan benefit or upon a change in control. As of December 31, 2015,each of the named executive officers was fully vested in their AEP Supplemental Benefit Planbenefit.

CSW Executive Retirement Plan. The CSW Executive Retirement Plan is a nonqualified de-fined benefit pension plan. It generally provides eligible participants with benefits that are in ex-cess of those provided under the terms of the former CSW Retirement Plan (which was mergedinto the AEP Retirement Plan) as determined upon the participant’s termination of employment.The excess benefits are calculated without regard to the limitations imposed by the Internal Rev-enue Code on annual compensation and annual benefits. As of December 31, 2015, Mr. Akins wasfully vested in his CSW Executive Retirement Plan benefit.

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Nonqualified Deferred Compensation for 2015

The following table provides information regarding contributions, earnings and balances forour named executive officers under AEP’s three non-qualified deferred compensation plans whichare each further described below.

NamePlan

Name(1)

ExecutiveContributionsin Last FY(2)

($)

RegistrantContributionsin Last FY(3)

($)

AggregateEarningsin LastFY(4)

($)

AggregateWithdrawals/Distributions

($)

AggregateBalance atLast FYE(5)

($)

Nicholas K. Akins . . . . . . . SRSP 104,100 78,075 41,889 — 1,370,436ICDP — — 16,960 — 314,099SORP — — (55,993) — 5,815,649

Brian X. Tierney . . . . . . . . SRSP 112,293 67,100 44,249 — 2,977,554SORP — — (10,001) — 1,038,756

Robert P. Powers . . . . . . . . SRSP 87,186 65,390 59,279 — 3,387,147ICDP — — (3,506) — 911,007SORP — — (28,128) — 2,921,450

David M. Feinberg . . . . . . . SRSP 59,908 44,931 9,175 — 333,328SORP 1,207,276 — (16,603) — 1,724,422

Charles E. Zebula . . . . . . . SRSP 41,344 31,008 42,577 — 1,385,565SORP — — (15,216) — 1,580,338

(1) “SRSP” is the American Electric Power System Supplemental Retirement Savings Plan.“ICDP” is the American Electric Power System Incentive Compensation Deferral Plan. “SORP”is the American Electric Power System Stock Ownership Requirement Plan.

(2) The amounts set forth under “Executive Contributions in Last FY” for the SRSP are reported inthe Summary Compensation Table as either (i) Salary for 2015 or (ii) the Non-Equity IncentivePlan Compensation for 2014. The amount set forth under “Executive Contributions in Last FY”for the SORP for Mr. Feinberg was reported in the Summary Compensation Table in the StockAwards column for 2012.

(3) The amounts set forth under “Registrant Contributions in Last FY” for the SRSP are reportedin the All Other Compensation column of the Summary Compensation Table.

(4) No amounts set forth under “Aggregate Earnings in Last FY” have been reported in the Sum-mary Compensation Table as there were no above market or preferential earnings credited toany named executive officer’s account in any of the plans.

(5) The amounts set forth in the “Aggregate Balance at Last FYE” column for the SRSP include theSRSP amounts reported in the “Executive Contributions in Last FY” and “Registrant Con-tributions in Last FY” columns. In addition, the “Aggregate Balance at Last FYE” for the SRSPincludes the following amounts previously reported in the Summary Compensation Table forprior years: $631,456 for Mr. Akins, $762,585 for Mr. Tierney, $799,570 for Mr. Powers and$209,707 for Mr. Feinberg. The amounts set forth in the “Aggregate Balance at Last FYE” forthe SORP include the SORP amounts reported in the “Executive Contributions in Last FY.” Inaddition, the “Aggregate Balance at Last FYE” for the SORP includes the following amountspreviously reported in the Summary Compensation Table for prior years: $2,670,419 forMr. Akins, $5,297 for Mr. Tierney, $4,980 for Mr. Powers and $400,370 for Mr. Feinberg.

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Overview. AEP maintains non-qualified deferred compensation plans that allow eligibleemployees, including the named executive officers, to defer receipt of a portion of their base sal-ary, annual incentive compensation and performance unit awards. The plans are unfunded. Partic-ipants have an unsecured contractual commitment from the Company to pay the amounts dueunder the plans from the general assets of the Company. AEP maintains the following non-qualified deferred compensation plans for eligible employees:

• The American Electric Power System Supplemental Retirement Savings Plan;

• The American Electric Power System Incentive Compensation Deferral Plan; and

• The American Electric Power System Stock Ownership Requirement Plan.

Supplemental Retirement Savings Plan. This plan allows eligible participants to save on apre-tax basis and to continue to receive Company matching contributions beyond the limits im-posed by the Internal Revenue Code on qualified plans of this type.

• Participants can defer up to 50 percent of their base salary and annual incentive award inexcess of the IRS’ eligible compensation limit for qualified plans, which was $265,000 for2015, up to $2,000,000.

• The Company matches 100 percent of the participant’s contributions up to 1 percent of eli-gible compensation and 70 percent of the participant’s contributions from the next 5 per-cent of eligible compensation (for a total Company match of up to 4.5% of eligiblecompensation).

• Participants may not withdraw any amount credited to their account until their termi-nation of employment with AEP. Participants may elect a distribution of their account as alump-sum or annual installment payments over a period of up to 10 years. Participantsmay delay the commencement of distributions for up to five years from the date of theirtermination of employment.

• Participants may direct the investment of their plan account among the investment optionsthat are available to all employees in AEP’s qualified Retirement Savings Plan and oneadditional option that provides interest at a rate set each December at 120 percent of theapplicable federal long-term rate with monthly compounding. In 2015, there were noabove-market or preferential earnings with respect to the Supplemental Retirement SavingsPlan.

Incentive Compensation Deferral Plan. This plan allows eligible employees to defer pay-ment of up to 80 percent of vested performance units.

• AEP does not offer any matching contributions.

• Participants may direct the investment of their plan accounts among the investment op-tions that are available to all employees in AEP’s qualified Retirement Savings Plan. Therewere no above-market or preferential earnings with respect to the Incentive CompensationDeferral Plan.

• Generally, participants may not withdraw any amount credited to their account until theirtermination of employment with AEP. However, participants may make one withdrawal ofamounts attributable to their pre-2005 contributions prior to termination of employment.The withdrawal amount would be subject to a 10 percent withdrawal penalty. Participantsmay elect among the same payment options for the distributions of their account value asdescribed above for the Supplemental Retirement Savings Plan.

Stock Ownership Requirement Plan. This plan assists executives in achieving their mini-mum stock ownership requirements. It does this primarily by tracking the executive’s AEP CareerShares. AEP Career Shares are a form of deferred compensation, which are unfunded and un-secured general obligations of AEP. The rate of return on AEP Career Shares is equivalent to thetotal return on AEP stock with dividends reinvested. Participants may not withdraw any amount

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credited to their account until their termination of employment with AEP. AEP Career Shares arepaid in cash. Participants may elect among the same payment options for the distribution of thevalue of their AEP Career Shares as described above for the Supplemental Retirement SavingsPlan.

Potential Payments Upon Termination of Employment or Change in ControlThe Company has entered into agreements and maintains plans that will require the Company

to provide compensation to the named executive officers in the event of a termination of theiremployment or a change in control of the Company. Actual payments will depend on the circum-stances and timing of any termination of employment or change of control. In addition, in con-nection with any actual termination or change in control transaction, we may enter into agree-ments or establish arrangements that provide additional or alternative benefits or amounts fromthose described below. The agreements and plans summarized below are complex legal documentswith terms and conditions having precise meanings, which are designed to address many possiblebut currently hypothetical situations.

Severance. AEP currently provides full-time employees, including the named executive offi-cers, with severance benefits if their employment is terminated as the direct result of a restructur-ing or downsizing (“Severance-Eligible Employees”) and the employee releases AEP from any andall claims. These severance benefits include:

• A lump sum severance payment equal to two weeks of base pay for each year of Companyservice, with a minimum of 8 weeks for employees with at least one year of AEP service;

• Continued eligibility for medical and dental benefits at the active employee rates for eight-een months or until the participant becomes eligible for coverage from another employer,whichever occurs first;

• For employees who are at least age 50 with 10 years of AEP service and who do not qualifyfor AEP’s retiree medical benefits or who will be bridged to such retiree benefit eligibility(described below), AEP also provides medical and dental benefit eligibility at rates equiv-alent to those provided to retirees until age 65 or until the participant becomes eligible forcoverage from another employer, whichever occurs first; and

• Outplacement services, the incremental cost of which may be up to $28,000 for executiveofficers.

Severance-Eligible Employees who have enough weeks of severance (up to one year) and vaca-tion to cover a period that would allow them to become eligible for retiree medical benefits, whichis available to those employees who are at least age 55 with at least 10 years of service(“Retirement-Eligible Employees”) are retained as employees on a paid leave of absence until theybecome retirement eligible. This benefit applies in lieu of severance and unused vacation pay-ments that these employees would otherwise receive. The Company pays any remaining severanceand vacation pay at the time of their retirement. This delay of an employee’s termination date doesnot apply to the plans providing nonqualified deferred compensation, which define a participant’stermination date by reference to Internal Revenue Code Section 409A.

A Severance-Eligible executive’s termination entitles that executive to a pro-rata portion ofany outstanding unvested performance units that the executive has held for at least six months andto the payment of a pro-rata portion of any RSUs to the extent not already vested and paid. Thepro-rated performance units will not become payable until the end of the performance period andremain subject to all performance objectives.

Severance-Eligible executives may continue financial counseling and tax preparation servicesfor one year following their termination up to a maximum annual incremental cost to the Companyfor 2015 of $12,875 plus related incidental expenses of the advisor.

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The Company also has an Executive Severance Plan (Executive Severance Plan) that providesseverance benefits to selected officers of the Company, including the named executive officers,subject to the executive’s agreement with the provisions of the plan, including confidentiality,non-solicitation and non-disparagement provisions. Executives remain eligible for benefits underthe general severance plan described above; however, any benefits provided under the ExecutiveSeverance Plan will be reduced by any amounts provided under the general severance plan. Bene-fits under the Executive Severance Plan would be triggered by a resignation for “good reason” oran involuntary termination by the Company without “cause” (each as defined below).

The term “cause” with respect to the Executive Severance Plan means:

(i) failure or refusal to perform a substantial part of the executive’s assigned duties andresponsibilities following notice and a reasonable opportunity to cure (if such failure iscapable of cure);

(ii) commission of an act of willful misconduct, fraud, embezzlement or dishonesty eitherin connection with the executive’s duties to the Company or which otherwise is in-jurious to the best interest or reputation of the Company;

(iii) repeated failure to follow specific lawful directions of the Board or any officer to whomthe executive reports;

(iv) a violation of any of the material terms and conditions of any written agreement oragreements the executive may from time to time have with the Company;

(v) a material violation of any of the rules of conduct of behavior of the Company;

(vi) conviction of, or plea of guilty or nolo contendere to, (A) a felony, (B) a misdemeanorinvolving an act of moral turpitude, or (C) a misdemeanor committed in connectionwith the executive’s employment with the Company which is injurious to the bestinterest or reputation of the Company; or

(vii) violation of any applicable confidentiality, non-solicitation, or nondisparagement cove-nants or obligations relating to the Company (including the provisions to which theexecutive agreed when enrolling in the plan).

An executive’s termination of employment that is covered by his or her change in controlagreement (described in the next section) or due to mandatory retirement, disability or deathwould not be considered an involuntary termination that may trigger the payment of benefits un-der the Executive Severance Plan.

An executive would have “good reason” for resignation under the Executive Severance Plan ifthere is any reduction in the executive’s then current annual base salary without the executive’sconsent; provided, however, that a uniform percentage reduction of 10% or less in the annual basesalary of all executives participating in the Executive Severance Plan who are similarly situatedwould not be considered good reason for resignation. Also, the Company must be given 10 daysfollowing receipt of written notice from the executive to restore the executive’s base salary beforehis or resignation may trigger plan benefits.

If benefits under the Executive Severance Plan are triggered, the affected named executive offi-cers would receive two times their base salary and target annual incentive payable over two years.In addition, a pro-rated portion of their outstanding unvested performance units and RSUs wouldvest. The pro-rated performance units will not become payable until the end of the performanceperiod and remain subject to all performance objectives. Any severance benefits payable under theExecutive Severance Plan are conditioned on the execution of an agreement by the executive offi-cer releasing claims against the Company and committing to a non-competition obligation.

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Change In Control. AEP defines “change in control” under its change in control agreementsand Long-Term Incentive Plan as:

• The acquisition by any person of the beneficial ownership of securities representing morethan one-third of AEP’s voting stock;

• A merger or consolidation of AEP with another corporation unless AEP’s voting securitiesoutstanding immediately before such merger or consolidation continue to represent at leasttwo-thirds of the total voting power of the surviving entity outstanding immediately aftersuch merger or consolidation; or

• Approval by the shareholders of the liquidation of AEP or the disposition of all or sub-stantially all of the assets of AEP.

AEP has a change in control agreement with each of the named executive officers that is trig-gered if there is a Qualifying Termination of the named executive officer’s employment. A“Qualifying Termination” for this purpose generally occurs when the executive’s employment isterminated in connection with that change in control (i) by AEP without “cause” or (ii) by thenamed executive officer for “good reason”, each as defined below. Such termination must be nolater than two years after the change in control. These agreements provide for:

• A lump sum payment equal to 2.99 times the named executive officer’s annual base salaryplus target annual incentive compensation award under the annual incentive program as ineffect at the time of termination; and

• Outplacement services.

The term “cause” with respect to AEP’s change in control agreements means:

(i) The willful and continued failure of the executive to perform the executive’s duties after awritten demand for performance is delivered to the executive by the Board; or

(ii) The willful conduct or omission by the executive, which the Board determines to be ille-gal; gross misconduct that is injurious to the Company; or a breach of the executive’sfiduciary duty to the Company.

The term “good reason” with respect to AEP’s change in control agreements means:

(i) An adverse change in the executive’s status, duties or responsibilities from that in effectimmediately prior to the change in control;

(ii) The Company’s failure to pay in a timely fashion the salary or benefits to which theexecutive is entitled under any employment agreement in effect on the date of the changein control;

(iii) The reduction of the executive’s salary as in effect on the date of the change in control;

(iv) Any action taken by the Company that would substantially diminish the aggregate pro-jected value of the executive’s awards or benefits under the Company’s benefit plans orpolicies;

(v) A failure by the Company to obtain from any successor the assent to the change in controlagreement; or

(vi) The relocation, without the executive’s prior approval, of the office at which the executiveis to perform services to a location that is more than fifty (50) miles from its locationimmediately prior to the change in control.

The Company must be given notice and an opportunity to cure any of these circumstancesbefore they would be considered to be “good reason.”

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Awards under the Long-Term Incentive Plan will vest upon a “Qualifying Termination” orwithin one year after a change in control. The term “Qualifying Termination” with respect to long-term incentive awards generally is the same as that described for the change in control agreements,except that an executive’s mandatory retirement at age 65 is explicitly excluded, and “Cause” isdefined more broadly to encompass:

(i) Failure or refusal to perform assigned duties and responsibilities in a competent or sat-isfactory manner;

(ii) Commission of an act of dishonesty, including, but not limited to, misappropriation offunds or any property of AEP;

(iii) Engagement in activities or conduct injurious to the best interest or reputation of AEP;

(iv) Insubordination;

(v) Violation of any material term or condition of any written agreement with AEP;

(vi) Violation of any of AEP’s rules of conduct of behavior;

(vii) Commission of a felony, a misdemeanor involving an act of moral turpitude, or a mis-demeanor committed in connection with employment at AEP which is injurious to thebest interest or reputation of AEP; or

(viii) Disclosure, dissemination, or misappropriation of confidential, proprietary, and/ortrade secret information.

In addition, performance units would be deemed to have been fully earned at 100 percent ofthe target score upon a “Qualifying Termination” following a change in control. The value of eachvested performance unit following a “Qualifying Termination” would be (1) the closing price of ashare of AEP common stock on the date of the Qualifying Termination or (2) if the date of theQualifying Termination is coincident with the change in control and if the change in control is theresult of a tender offer, merger, or sale of all or substantially all of the assets of AEP, the price paidper share of common stock in that transaction.

The AEP Supplemental Benefit Plan also provides that all accrued supplemental retirementbenefits to the extent then unvested become fully vested upon a change in control.

Termination ScenariosThe following tables show the incremental compensation and benefits that would have been

paid to each named executive officer who was employed by AEP on December 31, 2015 assumingthe hypothetical circumstances cited in each column occurred on December 31, 2015 and calcu-lated in accordance with the methodology required by the SEC. In connection with any actual ter-mination or change in control, the Company may enter into agreements or establish arrangementsthat provide additional benefits or amounts, or may alter the terms of benefits described below.

With respect to annual incentive compensation for the completed year, the initial calculatedannual incentive opportunity is shown, before any individual discretionary adjustment, whichvaries from the actual value paid and reported in the Summary Compensation Table.

The values shown in the change in control column are triggered only if the named executiveofficer’s employment is terminated under the circumstances (described above under Change InControl) that trigger the payment or provision of each of the types of compensation and benefitsshown.

No information is provided for terminations due to disability because it is not AEP’s practiceto terminate the employment of any employee so long as they remain eligible for AEP’s long-term

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disability benefits. AEP successively provides sick pay and then long-term disability benefits forup to two years to employees with a disability that prevents them from returning to their job. Suchdisability benefits continue for employees that cannot perform any occupation for which they arereasonably qualified generally until the employee reaches age 65. Because disabled participantsremain employed by the Company, they continue to vest in long-term incentive awards while theyare disabled. AEP treats a participant’s disability as a termination to the extent required by theregulations issued under Internal Revenue Code Section 409A, but such terminations only triggerthe payment of benefits that had previously vested. In addition, restricted stock unit awards allowparticipants terminated due to disability to continue to vest as if their employment had continuedso long as they remain continuously disabled.

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Potential Incremental Compensation and BenefitsThat Would Have Been Provided as the Result of Employment Termination

as of December 31, 2015For Nicholas K. Akins

Executive Benefits and PaymentsUpon Termination

Resignationor Retirement Severance

InvoluntaryTermination

for CauseChange In

Control Death

Compensation:Base Salary

($1,274,996) . . . . . . . . . $ 0 $ 2,549,992 $0 $ 3,812,238 $ 0Annual Incentive for

Completed Year(1) . . . $3,041,188 $ 3,041,188 $0 $ 3,041,188 $ 3,041,188Other Payment for

AnnualIncentives(2) . . . . . . . . $ 0 $ 3,187,490 $0 $ 4,765,298 $ 0

Long-Term Incentives:(3)2014-2016 Performance

Units(4) . . . . . . . . . . . . . $4,276,630 $ 4,276,630 $0 $ 6,414,944 $ 4,276,6302015-2017 Performance

Units(4) . . . . . . . . . . . . . $1,603,163 $ 1,603,163 $0 $ 4,809,489 $ 1,603,1632013 Restricted Stock

Units . . . . . . . . . . . . . . . $ 0 $ 638,753 $0 $ 943,450 $ 943,4502014 Restricted Stock

Units . . . . . . . . . . . . . . . $ 0 $ 726,858 $0 $ 1,832,825 $ 1,832,8252015 Restricted Stock

Units . . . . . . . . . . . . . . . $ 0 $ 618,355 $0 $ 2,061,185 $ 2,061,185Benefits:

Financial Counseling . . . $ 0 $ 12,875 $0 $ 12,875 $ 12,875Outplacement

Services(5) . . . . . . . . . . $ 0 $ 28,000 $0 $ 28,000 $ 0Total Incremental

Compensation andBenefits . . . . . . . . . . . . . . . . $8,920,981 $16,683,304 $0 $27,721,491 $13,771,316

Notes for the Potential Incremental Termination Scenario tables are provided collectively follow-ing the last such table.

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Potential Incremental Compensation and BenefitsThat Would Have Been Provided as the Result of Employment Termination

as of December 31, 2015For Brian X. Tierney

Executive Benefits and Payments UponTermination

Resignationor Retirement Severance

InvoluntaryTermination

for CauseChange In

Control Death

Compensation:Base Salary ($706,529) . . . . . $ 0 $1,413,058 $0 $2,112,522 $ 0Annual Incentive for

Completed Year(1) . . . . . . . $1,078,924 $1,078,924 $0 $1,078,924 $1,078,924Other Payment for Annual

Incentives(2) . . . . . . . . . . . . $ 0 $1,130,446 $0 $1,690,017 $ 0Long-Term Incentives:(3)

2014-2016 PerformanceUnits(4) . . . . . . . . . . . . . . . . $ 0 $1,197,254 $0 $1,795,881 $1,197,254

2015-2017 PerformanceUnits(4) . . . . . . . . . . . . . . . . $ 0 $ 454,992 $0 $1,364,975 $ 454,992

2013 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 0 $ 179,935 $0 $ 265,769 $ 265,769

2014 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 0 $ 203,469 $0 $ 513,067 $ 513,067

2015 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 0 $ 175,509 $0 $ 585,031 $ 585,031

Benefits:Financial Counseling . . . . . . $ 0 $ 12,875 $0 $ 12,875 $ 12,875Outplacement Services(5) . . $ 0 $ 28,000 $0 $ 28,000 $ 0

Total Incremental Compensationand Benefits . . . . . . . . . . . . . . . . $1,078,924 $5,874,462 $0 $9,447,061 $4,107,912

Notes for the Potential Incremental Termination Scenario tables are provided collectively follow-ing the last such table.

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Potential Incremental Compensation and BenefitsThat Would Have Been Provided as the Result of Employment Termination

as of December 31, 2015For Robert P. Powers

Executive Benefits and Payments UponTermination

Resignationor Retirement Severance

InvoluntaryTermination

for CauseChange-In-

Control Death

Compensation:Base Salary ($706,529) . . . . . $ 0 $1,413,058 $0 $2,112,522 $ 0Annual Incentive for

Completed Year(1) . . . . . . . $1,078,924 $1,078,924 $0 $1,078,924 $1,078,924Other Payment for Annual

Incentives(2) . . . . . . . . . . . . $ 0 $1,130,446 $0 $1,690,017 $ 0Long-Term Incentives:(3)

2014-2016 PerformanceUnits(4) . . . . . . . . . . . . . . . . $1,197,254 $1,197,254 $0 $1,795,881 $1,197,254

2015-2017 PerformanceUnits(4) . . . . . . . . . . . . . . . . $ 450,408 $ 450,408 $0 $1,351,223 $ 450,408

2013 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 0 $ 179,935 $0 $ 265,769 $ 265,769

2014 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 0 $ 203,469 $0 $ 513,067 $ 513,067

2015 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 0 $ 173,744 $0 $ 579,146 $ 579,146

Benefits:Financial Counseling . . . . . . $ 0 $ 12,875 $0 $ 12,875 $ 12,875Outplacement Services(5) . . $ 0 $ 28,000 $0 $ 28,000 $ 0

Total Incremental Compensationand Benefits . . . . . . . . . . . . . . . . $2,726,586 $5,868,113 $0 $9,427,424 $4,097,443

Notes for the Potential Incremental Termination Scenario tables are provided collectively follow-ing the last such table.

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Potential Incremental Compensation and BenefitsThat Would Have Been Provided as the Result of Employment Termination

as of December 31, 2015For David M. Feinberg

Executive Benefits and Payments UponTermination

Resignationor Retirement Severance

InvoluntaryTermination

for CauseChange In

Control Death

Compensation:Base Salary ($589,160) . . . . . $ 0 $1,178,320 $0 $1,761,588 $ 0Annual Incentive for

Completed Year(1) . . . . . . . $786,775 $ 786,775 $0 $ 786,775 $ 786,775Other Payment for Annual

Incentives(2) . . . . . . . . . . . . $ 0 $ 824,824 $0 $1,233,112 $ 0Long-Term Incentives:(3)

2014-2016 PerformanceUnits(4) . . . . . . . . . . . . . . . . $ 0 $ 612,534 $0 $ 918,801 $ 612,534

2015-2017 PerformanceUnits(4) . . . . . . . . . . . . . . . . $ 0 $ 238,169 $0 $ 714,507 $ 238,169

2013 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 0 $ 89,974 $0 $ 132,914 $ 132,914

2014 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 0 $ 104,099 $0 $ 262,506 $ 262,506

2015 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 0 $ 91,880 $0 $ 306,267 $ 306,267

Benefits:Financial Counseling . . . . . . $ 0 $ 12,875 $0 $ 12,875 $ 12,875Outplacement Services(5) . . $ 0 $ 28,000 $0 $ 28,000 $ 0

Total Incremental Compensationand Benefits . . . . . . . . . . . . . . . . $786,775 $3,967,450 $0 $6,157,345 $2,352,040

Notes for the Potential Incremental Termination Scenario tables are provided collectively follow-ing the last such table.

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Potential Incremental Compensation and BenefitsThat Would Have Been Provided as the Result of Employment Termination

as of December 31, 2015For Charles E. Zebula

Executive Benefits and Payments UponTermination

Resignationor Retirement Severance

InvoluntaryTermination

for CauseChange-In-

Control Death

Compensation:Base Salary ($444,600) . . . . . $ 0 $ 889,200 $0 $1,329,354 $ 0Annual Incentive for

Completed Year(1) . . . . . . . $ 508,909 $ 508,909 $0 $ 508,909 $ 508,909Other Payment for Annual

Incentives(2) . . . . . . . . . . . . $ 0 $ 533,520 $0 $ 797,612 $ 0Long-Term Incentives:(3)

2014-2016 PerformanceUnits(4) . . . . . . . . . . . . . . . . $ 518,991 $ 518,991 $0 $ 778,487 $ 518,991

2015-2017 PerformanceUnits(4) . . . . . . . . . . . . . . . . $ 213,773 $ 213,773 $0 $ 641,320 $ 213,773

2013 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 0 $ 79,086 $0 $ 116,831 $ 116,831

2014 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 88,214 $ 222,475 $ 222,475

2015 Restricted StockUnits . . . . . . . . . . . . . . . . . . $ 0 $ 82,440 $0 $ 274,801 $ 274,801

Restricted Stock Units . . . . . $ 0 $0 $ 621,566 $ 621,566Benefits:

Financial Counseling . . . . . . $ $ 12,875 $0 $ 12,875 $ 12,875Outplacement Services(5) . . $ 0 $ 28,000 $0 $ 28,000 $ 0

Total Incremental Compensationand Benefits . . . . . . . . . . . . . . . . $1,241,673 $2,955,008 $0 $5,332,230 $2,490,221

(1) Executive officers and all other employees are eligible for an annual incentive award based ontheir earnings for the year if they remain employed with AEP through year-end, if they die orif they incur a retirement-eligible termination. The amount shown is based on the calculatedannual incentive opportunity, as shown on page 34, but annual incentives for executive offi-cers are awarded at the discretion of the HR Committee or independent members of the Boardpursuant to the award determination process described in the Compensation Discussion andAnalysis.

(2) Represents a payment of two times the applicable target annual incentive opportunity for eachof the named executive officers in the event of a severance. Represents a payment of 2.99times the applicable target annual incentive opportunity for each of the named executive offi-cers in the event of a change in control.

(3) The long-term incentive values shown represent the values that would be paid under such cir-cumstances shown in each column, which are different from the values calculated in accord-ance with FASB ASC Topic 718.

(4) The target value of performance unit awards are shown. The actual value paid in the event ofresignation or retirement, severance or death, if any, will depend on the actual performancescore for the full performance period. Any payments for awards under those circumstances arenot paid until the end of the three year performance period. In the event of a qualifying termi-nation in connection with a change in control, awards would be paid at a target performancescore as soon as administratively practical after the change in control.

(5) Represents the maximum cost of Company-paid outplacement services, which the Companyprovides through an unaffiliated third party vendor.

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The following table shows the value of previously earned and vested compensation and bene-fits as of December 31, 2015, that would have been provided to each named executive officer fol-lowing a termination of his or her employment on December 31, 2015. In all cases, these amountswere generally earned or vested over multiple years of service to the Company.

Non-Incremental Post-Termination Compensation and Benefits on December 31, 2015

Name

Long-Term Incentives Benefits

VestedPerformance

Units(1)

AEP CareerShares

(2)

VacationPayout

(3)

PostRetirement

Benefits(4)

DeferredCompensation

(5)

Nicholas K. Akins . . . . . . . . . . . . $11,643,337 $5,972,908 $137,307 $1,638,234 $1,684,535Brian X. Tierney . . . . . . . . . . . . . . $ 3,279,902 $1,066,865 $ 30,639 $ 996,201 $2,977,554Robert P. Powers . . . . . . . . . . . . . $ 3,279,902 $3,000,439 $ 16,250 $4,164,800 $4,298,154David M. Feinberg . . . . . . . . . . . . $ 1,639,951 $1,771,058 $ 46,170 $ 212,886 $ 333,328Charles E. Zebula . . . . . . . . . . . . . $ 1,441,658 $1,623,053 $ 17,100 $1,045,714 $1,385,565

(1) Represents the value of performance units that vested on December 31, 2015 calculated usingthe market value of these shares on December 31, 2015. However, the actual value realized ordeferred from these performance units was based on the 20-day average closing market priceof AEP common stock on the vesting date.

(2) Represents the value of AEP share equivalents deferred mandatorily into the AEP StockOwnership Requirement Plan calculated using the market value of these shares on De-cember 31, 2015. However, the actual value that would have been realized from these AEPshare equivalents would have been based on the 20-day average closing market price of AEPcommon stock at the end of the month of employment termination.

(3) Represents accumulated but unused vacation.(4) Represents the lump sum benefit calculated for the named executive officer pursuant to the

terms of the AEP Retirement Plan, the AEP Supplemental Benefit Plan and the CSW ExecutiveRetirement Plan, as applicable.

(5) Includes balances from the Supplemental Retirement Savings Plan and the Incentive Compen-sation Deferral Plans, but does not include AEP Career Share balances, which are listed sepa-rately in column (2).

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Share Ownership of Directors and Executive OfficersThe following table sets forth the beneficial ownership of AEP Common Stock and stock-based

units as of February 18, 2016 for all Directors, director nominees, each of the persons named in theSummary Compensation Table and all Directors and executive officers as a group.

Unless otherwise noted, each person had sole voting and investment power over the numberof shares of AEP common stock set forth across from his or her name. Fractions of shares and unitshave been rounded to the nearest whole number.

Name Shares(a)Stock

Units(b) Total(c)

N. K. Akins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,534 102,504 160,038D. J. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 15,680 15,680J. B. Beasley, Jr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 5,321 5,321R. D. Crosby, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 37,334 37,334D. M. Feinberg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,760 30,560 32,320L. A. Goodspeed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 38,170 38,170T. Hoaglin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 31,113 32,113S. B. Lin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 10,693 11,693R. C. Notebaert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 15,680 15,680L. L. Nowell III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 34,015 34,015R. P. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,040 75,645 76,685R. S. Rasmussen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 10,122 10,122O. G. Richard III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,195 8,926 11,121B. X. Tierney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,593 42,099 51,692S. M. Tucker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,532(d) 26,688 28,220C. E. Zebula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 27,854 27,856All directors, nominees and executive officers as a group

(19 persons)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,093 574,455 652,548

(a) None of the shares is pledged. This column also includes share equivalents held in the AEPRetirement Savings Plan.

(b) This column includes amounts deferred in stock units and held under the Stock UnitAccumulation Plan for Non-Employee Directors and amounts deferred in share equivalents inthe Retainer Deferral Plan for Non-Employee Directors. This column also includes amountsdeferred in share equivalents held under AEP’s Supplemental Retirement Savings Plan, AEP’sIncentive Compensation Deferral Plan and the following numbers of AEP Career Shares:Mr. Akins, 102,504; Mr. Feinberg, 30,560; Mr. Powers, 51,492; Mr. Tierney, 18,309;Mr. Zebula, 27,854 and all directors and executive officers as a group, 286,629.

(c) This column excludes RSUs that will not vest within 60 days.(d) Includes 32 shares held by family members of Ms. Tucker over which she disclaimed benefi-

cial ownership.(e) As of February 18, 2016, the directors and executive officers as a group beneficially owned

less than one percent of the outstanding shares of the Company’s common stock.

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Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires AEP’s executive officers, the principal accounting

officer, directors and persons who beneficially own more than 10 percent of AEP’s common stockto file initial reports of ownership and reports of changes in ownership of AEP common stock withthe SEC. Executive officers, the principal accounting officer and directors are required by SECregulations to furnish AEP with copies of all reports they file. AEP believes that all of its directors,executive officers and the principal accounting officer, timely met all of their respective Sec-tion 16(a) filing requirements during 2015.

Share Ownership of Certain Beneficial OwnersSet forth below are the only persons or groups known to AEP as of February 25, 2016, with

beneficial ownership of more than five percent of AEP common stock.

AEP Shares

Name and Address ofBeneficial Owner

Amount ofBeneficialOwnership

Percent ofClass

BlackRock, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 East 52nd StreetNew York, NY 10022

33,561,895(a) 6.8%

The Vanguard Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100 Vanguard BoulevardMalvern, PA 19355

30,575,864(b) 6.2%

(a) Based on the Schedule 13G filed with the SEC, BlackRock, Inc. reported that it has sole powerto vote 28,778,962 shares and sole dispositive power for 33,561,895 shares.

(b) Based on the Schedule 13G filed with the SEC, The Vanguard Group reported that it has solepower to vote 947,911 shares, shared power to vote 48,800 shares, sole dispositive power for29,624,725 shares and shared dispositive power for 951,139 shares.

Shareholder Proposals and NominationsYou may submit proposals for consideration at future stockholder meetings. For a shareholder

proposal to be considered for inclusion in our proxy statement for the annual meeting next year,the Corporate Secretary must receive the written proposal at our principal executive offices nolater than November 16, 2016. Such proposals also must comply with SEC regulations under Rule14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials.Proposals should be addressed to:

Corporate SecretaryAmerican Electric Power Company, Inc.

1 Riverside PlazaColumbus, Ohio 43215

For a stockholder proposal that is not intended to be included in our proxy statement for nextyear’s annual meeting under Rule 14a-8, the stockholder must provide the information required byour Bylaws and give timely notice to the Corporate Secretary in accordance with our Bylaws,which, in general, require that the notice be received by the Corporate Secretary:

• not earlier than the close of business on December 27, 2016; and

• not later than the close of business on January 26, 2017.

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If the date of the stockholder meeting is moved more than 30 days before or 70 days after theanniversary of our annual meeting for the prior year, then notice of a stockholder proposal that isnot intended to be included in our proxy statement under Rule 14a-8 must be received no earlierthan the close of business 120 days prior to the meeting and not later than the close of business onthe later of the following two dates:

• 90 days prior to the meeting; and

• 10 days after public announcement of the meeting date.

Deadlines for the nomination of director candidates are summarized below. This summary isqualified by our Bylaws.

Our Bylaws permit stockholders to nominate directors for consideration at an annual meeting.To nominate a director for consideration at an annual meeting, a nominating stockholder mustprovide the information required by our Bylaws and give timely notice of the nomination to theCorporate Secretary in accordance with our Bylaws, and each nominee must meet the qual-ifications required by our Bylaws. To nominate a director for consideration at next year’s annualmeeting, in general the notice must be received by the Corporate Secretary between the close ofbusiness on December 27, 2016 and the close of business on January 26, 2017, unless the annualmeeting is moved by more than 30 days before or 70 days after the anniversary of the prior year’sannual meeting, in which case the deadline will be as set forth above.

In addition, our Bylaws provide that, under certain circumstances, a stockholder or group ofstockholders may include in our annual meeting proxy statement director candidates that theyhave nominated. These proxy access provisions of our Bylaws provide, among other things, that astockholder or group of up to twenty stockholders seeking to include director candidates in ourannual meeting proxy statement must own 3% or more of our outstanding common stock con-tinuously for at least the previous three years. The number of stockholder-nominated candidatesappearing in any annual meeting proxy statement cannot exceed the greater of (x) two or (y) 20%of the number of directors then serving on the Board. If 20% is not a whole number, the maximumnumber of stockholder-nominated candidates would be the closest whole number below 20%.Based on the current Board size of 12 directors, the maximum number of proxy access candidatesthat we would be required to include in our proxy materials for an annual meeting is two. Nomi-nees submitted under the proxy access procedures that are later withdrawn or are included in theproxy materials as Board-nominated candidates will be counted in determining whether the 20%maximum has been reached. If the number of stockholder-nominated candidates exceeds 20%,each nominating stockholder or group of stockholders may select one nominee for inclusion in ourproxy materials until the maximum number is reached. The order of selection would be de-termined by the amount (largest to smallest) of shares of our common stock held by each nominat-ing stockholder or group of stockholders. The nominating stockholder or group of stockholdersalso must deliver the information required by our Bylaws, and each nominee must meet the qual-ifications required by our Bylaws. Requests to include stockholder-nominated candidates in ourproxy materials for next year’s annual meeting must be received by the Corporate Secretary:

• not earlier than the close of business on October 17, 2016; and

• not later than the close of business on November 16, 2016.

If the date of the stockholder meeting is moved more than 30 days before or 70 days after theanniversary of our annual meeting for the prior year, then notice of a stockholder proposal that isnot intended to be included in our proxy statement under Rule 14a-8 must be received no laterthan the close of business on the later of the following two dates:

• 120 days prior to the meeting; and

• 10 days after public announcement of the meeting date.

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Solicitation ExpensesThese proxies are being solicited by our Board of Directors. The costs of this proxy solicitation

will be paid by AEP. Proxies will be solicited principally by mail and the Internet, but some tele-phone or personal solicitations of holders of AEP common stock may be made. Any officers oremployees of the AEP System who make or assist in such solicitations will receive no additionalcompensation for doing so. AEP will request brokers, banks and other custodians or fiduciariesholding shares in their names or in the names of nominees to forward copies of the proxy-soliciting materials to the beneficial owners of the shares held by them, and AEP will reimbursethem for their expenses incurred in doing so at rates prescribed by the New York Stock Exchange.We have engaged Morrow & Co., LLC, 470 West Ave., Stamford, Connecticut 06902, to assist uswith the solicitation of proxies for an estimated fee of $10,500, plus reasonable out-of-pocket ex-penses.

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Exhibit A

Reconciliation of GAAP and Non-GAAP Financial Measures.

The Company reports its financial results in accordance with generally accepted accountingprinciples (“GAAP”). However, AEP’s management believes that the Company’s operating earningsprovide users with additional meaningful financial information about the Company’s performance.Management also uses these non-GAAP financial measures when communicating with stock ana-lysts and investors regarding its earnings outlook and results. Non-GAAP financial measuresshould be viewed in addition to, and not as an alternative for, the Company’s reported results pre-pared in accordance with GAAP.

For additional details regarding the reconciliation of GAAP and non-GAAP financial measuresbelow, see the Company’s Current Report on Form 8-K filed with the SEC on January 28, 2016.

EPS

Operating Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3.69Special Items

Disposition of Commercial Barge Operations . . . . . . . . . . . . . 0.48GAAP Reported Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4.17

A-1